2005 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit
8-11-2005 

# In Re: C omm B ank
P r e c e de nt i al or N on-P r e c e de nt i al : P r e c e de nt i al D ocke t N o . 03-4220

F o llow thi s and a dd it ion al work s at : http://d i git alc ommon s .l a w . vi ll anova . e du/thir dc ir c uit_2005

Thi s de c i sion i s br ou ght t o you for f r e e and ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i ll anova U nive r sity S choo l of L a

w Di git al Reposit ory

. It h as be e n a c c ept e d for inclusion in 2005 D e c i sion s b y an authori z e d a dmini s tr at or of V i ll anova U nive r sity S choo l of L a

w Di git al Reposit ory

. F or mor e inform at ion, p le as e c ont a ct Be n j amin . C arl s on@l a

w . vi ll anova . e du
. Re c omme nde d C it at ion

" In Re: C omm B ank " (2005). 2005 D e cisio n s . P ape r 617. http://d i git alc ommon s .l a

w . vi ll anova . e du/thir dc ir c uit_2005/617P RE CE DE NT I AL U N I TED STA TES C O U RT O F A PPEA LS F O R T H E T H IR D C IR C U IT

____ N o s . 0 3 -4 2 2 0 , 0 3 -4 2 2 1 , 0 3 -4 2 7 5 , 0 3 -4 2 9 4 , 0 3 -4 3 1 6 , 0 3 -4 3 1 9 , 0 3 -4 5 0 4 , 0 3 -4 7 3 2 , 0 3 -4 8 3 7 , 0 4 -4 8 3 8 , 0 3 -4 8 6 2 ,

04- 1002, and 04- 1039

________ IN R E : C O M M U N IT Y B A N K O F N O R T H E R N V IR G IN IA AN D G UA RA NTY NA TI ON AL B AN K O F TALLAH ASSEE S E CO ND MORT GAGE L OAN L I T I GAT I ON
S tep h a n ie S p a n n ; L e o n ila T . N in i; E u f ro n io N in i; Jo h n H a rd t; R o b b in V e rb e c k ; S tep h a n ie H a f f o rd ; C h a rle s B . P o in d e x ter ; M a u re e n F . P o in d e x ter ; D a v id B . W a lk e r; S h u n d ra R . W a lk e r; J e s s i e Do d d ; J a me s Be c k i u s ; Li n d a W h i t e h e a d ; Lyn e l l B. Wi n g f i e l d ; J a r i o I v a n S a rr i e ; Be a tr i z S a rr i e ; M i c h e l l e K. M or gan; Shar on Fi nnerty ; D onal d A ppl et on; J eane t t e A ppl et on;

Ed e l ma n , Co mb s & La t tu rn e r , LL C; A ppel l ant s i n N o. 03- 4220 W a lte rs , B e n d e r, S tr o h b e h n & V a u g h a n , P .C .,

A ppel l anti n N o. 03- 4221 Scot tC
. B or i s on, A ppel l anti n N o. 03- 4294 B adeau x C l ass M em ber O pt- O uts , A ppel l ant s i n N os . 03- 4316 and 03- 4838 A l abam a C l ass M em ber O pt- O uts , A ppel l ant s i n N o. 03- 4319 D ic k e y , M c C a m e y& C h ilc o te , P .C ., D a v id J . A rm s tr o n g , E s q ., D o u g la s C . L a S o ta , E s q ., F ra n k lin R . N ix , E s q ., G eorgi a C l ass M em ber O pt- O uts , A ppel l ant s i n N os . 03- 4275 and 03- 45042 Ro n a l d D. Gr a y ; Oz yT. M c Da n i e l ; J e r l i n e M c Da n i e l ; Ta mmy and D avi d W as em; R i char d and M ar gar etH ar l i n; Sy l ves t erand P a tr i c i a Wa t k i n s ; S t e p h e n D. J e n s e n ; J o s e p h E
. a n d Cyn th i a A. B row nfiel d; M i ssouri C l ass M em ber O pt- O uts ; Il l i no i s C l ass M em ber O pt- O uts , A ppel l ant s i n N o. 03- 4732 M ich a e l L a n e ; M a rc o s E sc a lan te; C h e ry l W h ite-B e rry ;

W i l l i am P
. G orny ; R i nal do Sw ayne, A ppel l ant s i n N o. 03- 4837 F ran k li n R
. N ix, E sq . ; G eo rgia C lass M em b er

O pt- O uts and O bject ors, A ppel l ant s i n N o. 03- 4862 M a ri o n D e lo yS m ith , A ppel l anti n N o. 04- 1002 Jo h n W . S h a rb ro u g h , III, E sq .; T h e S h a rb ro u g h L a w F irm ;

A lab a m a C las s M e m b e r O p t-O u ts A ppel l ant s i n N o. 04- 1039

________ O n A p p ea l from the U n it ed S tat es D istri ct C o u rt f o r th e W e ste rn D istric t o f P e n n sy lv a n ia (D .C . N o s . 0 3 -c v -0 0 4 2 5 , 0 2 -c v -0 1 2 0 1 , 0 2 -c v -0 1 5 6 3 , 02- cv- 01616, 02- cv- 01999, 02- cv- 02000) D i s tr i ctJ udge: H onor abl e G aryL
. L anca s t er

A r gued February17, 2005 B efor e: SL O V I T E R , A M B R O , and A L D I SE R T , C i r cui tJ udges

( Fi l ed: A ugus t11, 2005) D ani el A
. E del m an C athl een M
. C om bs ( A r gued)3 J ames O
. L atturner E del m an, C om bs & L atturner C hi cago, I L 60603 A t t orney s forA ppel l ant s St ephani e Spann, etal
. , i n N o. 03- 4220 J
. M i chae l V aughan ( A r gued) D avi d M
. Skeens ( A r gued) R
. F red erick W alt ers W al t er s , B ender , St r ohbehn & V aughan K ans as C i ty , M O 64105 A t t orney s for A pp el l ants R on al d D
. G ray , etal
. , i n N os. 0 3 -4 7 3 2 , et a l. Fr ankl i n R
. N i x ( A r gued) L a w O f f ice s o f F ra n k lin R . N ix A t l ant a, G A 30327 A t t orneyfor A pp el l ants G eorgi a M em ber O pt- O uts & O b jec to rs, e t al., in N o s. 0 3 -4 8 6 2 , et a l. Jo h n W
. S h arb rou g h , III T h e S h arb rou g h L aw F irm M obi l e, A L 36601 A tto rn e yf

o r A p p e llan ts A lab a m a C las s M e m b e r O p tO u ts, e t al., in N o s. 0 3 -4 3 1 9 , et a l. B r i an S. W ol fm an ( A r gued) C har l ot t e G ar den Publ i c C i t i zen Li t i gat i on G r oup W as hi ngt on, D
. C
. 20009 Scot tC
. B or i s on L eg g L aw F irm Fr eder i ck, M D 21703 A tto rn e y s f

o r A p p e llan ts B a d e a u x C las s M e m b e r O p t-4 O u ts, e t al., in N o s. 0 3 -4 3 1 6 , et a l. D avi d G
. O ber di ck M e y e r, U n k o v ic & S c o tt Pi t t s bur gh, PA l 5222 F
. D ou glas R oss O di n Fel m an & Pi t t l eman Fai r fax, V A 22031 A t t orney s forA ppel l ee Com m uni tyB ank of N or thern V irg in ia, in N o s. 0 3 -4 2 2 0 , et a l. G aryP. H unt R icha rd B
. T u ck er, I II T u ck er A ren sb erg Pi t t s bur gh, PA l 5222 A t t orney s forA ppel l ee G uar antyN at i onal B ank of T a llah a ss e e , in N o s. 0 3 -4 2 2 0 , et a l. R
. B ruce Car l s on ( A r gued) C ar l s on L ynch Sew i ckl ey , PA l 5l 43 E r i c G
. C al houn L aw s on, Fi el ds & C al houn A ddi s on, T X 75001 A
. H o yt R o w ell , III D an iel M y ers R i char ds on, Patr i ck, W es tbr ook & B r i ckman M t
. Pl eas ant , SC 29464 A tto rn e y s f

o r A p p e lle e s C la s s M e m b e rs in N o s . 0 3 -4 2 2 0 , e t al. T hom as L
. A l l en ( A r gued) R oyW
. A r nol d Ja m e s C . M a rtin5 D onna M
. D obl i ck R e e d S m ith Pi t t s bur gh, PA l 5219 A t t orney s forA ppel l ee G M A C R es i dent i al Fundi ng C o rp o ra tio n , in N o s. 0 3 -4 2 2 0 , et a l. L aw r ence H
. R i chmond Feder al D epos i tI ns ur ance C orp. W as hi ngt on, D
. C
. 20434 A t t orneyforI nt ervenorFeder al D epos i tI ns ur ance C o rp o ra tio n in N o s. 0 3 -4 2 2 0 , et a l.

T a b le o f C o n ten ts I. F ac ts an d P roc ed u ral H ist o ry A. Th e Al l e g e d I l l e g a l Le n d i n g S c h e me B
. T he Separ at e C l as s A ct i ons C
. C ons ol i dat i on of the C l as s A ct i ons D
. T he O pt - O utSol i ci t at i ons E . T h e Jo in t M o tio n to In v a lid a te O p t-O u ts F . T h e O c to b e r 3 1 , 2 0 0 3 C o n f e re n c e C a ll G
. A ppel l ant s ’ M ot i on t o I nt ervene H
. A p p ell an ts’ R eq u est fo r D isco v ery I
. T he Fai r nes s H ear i ng J
. Th e F DI C a s Re c e i v e rf o rGNBT I I
. J ur i s di ct i on III. A n a ly sis A
. C l as s C ert i fi cat i on 1. C ert i fi cat i on Pr oces s Fol l ow ed bythe D i s tr i ct C o u rt 2. T he A ppr opr i at enes s of C l as s C ert i fi cat i on i. T h e R u le 2 3 (a ) C riter ia ii. T h e R u le 2 3 (b )(3 ) C riter ia iii . S u m m a ryo f

R u le 2 3 A n a ly sis B
. T he D i s tr i ctC our t ’ s O ct ober14th and 17th O r der6 In v a lid a tin g O p t-O u ts C
. T he M ot i ons t o I nt ervene D
. A p p ell an ts’ R eq u est fo r D isco v ery E
. T he Fai r nes s of the Sett l ement F. T he Pet i t i on forM andamus I V
. C oncl us i on

____________

OPI NI ON O F THE COURT

______________ SL O V I T E R , C i r cui tJ udge. T h i s c o n s o l i d a t e d a p p e a l a r i s e s f r o m a “ s e t t l e m e n to n l y” cl as s act i on i n t he D i s tr i ctC our tforthe W es t ern D i s tr i ctof Penns y l vani a thathad cons ol i dat ed s i x s epar at e ac t i ons al l egi ng an i l l egal hom e equi tyl endi ng s cheme agai ns ttw o banks and a companythatacqui r ed s econd mor t gage l oans fr om thos e banks i n t he s econda r ym arket
. Pl ai nt i ffs ar e per s ons w ho borr ow ed fr om the tw o banks and s i gned s econd mor t gages . O n D ece m ber 4, 2003, the D i s tr i ctC our ti s s ued a Fi nal O r derappr ovi ng a pr opos ed s ett l ement , w hi ch aw ar ded $33 mi l l i on t o a cl as s of 4 4 ,0 0 0 b o rro w e rs a n d $ 8 .1 m ill io n in a tto rn e yf e e s. A p p e llee s in thi s cas e ar e the s ett l i ng part i es . A ppel l ant s ar e a numberof l aw fi r m s and pl ai nt i ff c l as s m ember s w ho chal l enge the D i s tr i ct C our t ’ s j ur i s di ct i on, near l yeveryas pectof the s ett l ement p ro c e s s , a n d th e f

a ir n e s s o f

th e s e ttle m e n t its e lf
. I . F ACT S AND P ROCE DURAL HI S TORY A. Th e Al l e g e d I l l e g a l Le n d i n g S c h e me T hi s act i on al l eges a pervas i ve pr edat oryand i l l egal l endi ng s cheme aff

ect i ng borr ow er s nat i onw i de. T he al l eged m as t erm i nd of the s cheme w as the Shum w ayO r gani zat i on ( “Shum w ay ”) , a r es i dent i al m or t gage l oan bus i nes s oper at i ng out of C han t i l l y , V i rgi nia. T hroug h it s sever al bu si ness form s, in c lu d in g E q u ityP lu s F in a n c ial, In c . (“E q u ityP lu s” ), E q u ityT hes e mi s s t at ement s w er e al l egedl yfound i n Sect i ons 800 1 and 11 00 of the ban ks’ H U D -1 Sett l em ent St at em ents
. 7 G u a ra n ty , L L C (“ E q u ityG u a ra n ty ” ), an d v a rio u s title compani es , Shum w ayoffe r ed hi gh- i nt er es tm or t gage- backe d l oan s t o d ebt- l aden ho m eow ners. Shum w ayw as s ubj ectt o fee caps and i nt er es tcei l i ngs i m po sed byvari ou s st at e m ort gag e l end i ng l aw s becau se i tw as a non- depos i t oryl ender
. St at e and na t i onal l ychart er ed banks , by c o n tr a s t, a re a rg u a b ly n o t s u b je c t to th e s a m e re s tr ic tio n s . P lain tiff s a lleg e th a t in a n e f

f o rt to c irc u m v e n t th e re lev a n t sta te f e e a n d in ter e st c e ili n g s, S h u m w a yf o rm e d a ss o c iatio n s w ith s ever al fi nanci al l ydi s tr es s ed banks , i ncl udi ng tw o banks named a s d e f e n d a n ts, th e C o m m u n ityB a n k o f N o rth e rn V irg in ia ( “C B N V ”) ( a s t at e cha r t er ed bank) and the G uar antyN at i onal B a n k o f T a lla h a s s e e (“ G N B T ” ) ( a n a tio n a lly c h a rt e re d b a n k ). C B N V an d G N B T w ere all eg ed lyp aid f o r no thing m o re than perm i t t i ng S hu m w ayt o d i sguis e t he o ri gin of t heirl oan s, th u s c re a tin g th e a p p e a ra n c e th a t f e e s a n d in ter e st w e re p a id s ol el yt o a depos i t oryi ns t i tut i on. I n r eal i ty , the overw hel m i ng m ajorityo f f

ee s an d o ther c h arg es a sso ciated w ith the lo an s w ere f u n n e led th ro u g h th e tw o b a n k s to S h u m w a yv ia E q u ityP lu s (in th e c a se o f

lo a n s p u rp o rte d lym a d e b yC B N V ) a n d E q u ity G u a ra n ty (in th e c a s e o f lo a n s p u rp o rt e d ly m a d e b yG N B T ). P lain tiff s f u rth e r a lleg e th a t b o th C B N V a n d G N B T u n if o rm ly m i s r epr es ent ed the apport i onm entand di s tr i but i on of s ett l ement and t i t l e fe es i n t hei rH U D
- 1 Set t l ementSt at ementform s , i s s ued bythe U ni t ed St at es D epart m entof H ous i ng and U rban D evel opm ent , and thatthe s t at ed fe es i n the H U D
- 1 Set t l ement 1 St at ement s i ncl uded i l l egal ki ckbac ks t o Shum w aythatdi d not r efl ectthe val ue of a nys ervi ces actual l yper form ed. G M A C R e s id e n tia l F u n d in g C o rp o ra tio n (“ R F C ” ), a di vi s i on of G M A C Fi nanci al Ser vi ces ( partof the G ener al M ot or s C orpor at i on fami l y ) , w as al l eged t o be an e s s ent i al coc on s pi r a t ori n the Shu mw a ys c he me. I n the l a t e 19 90 s , RFC der i ved a s ubs t ant i al por t i on of i t s bus i nes s bypur chas i ng8 “j um bo” mort gages ( m or t gages w i th l oan bal ance s above the pur chas i ng author i tyof Fr eddi e M ac a nd Fanni e M ae) and es peci al l yH i gh- L T V ( l oan- t o- val ue) l oans ( l oans w her e the amount fi nance d r epr es ent ed up t o 125% of the val ue of the s ecur i t i zed c ol l at er al ) i n the s econda rym arket
. B y1999, Shum w ay , act i ng thr ough C B N V and G N B T , had bec om e the l ar ges tpr oducerof H i gh- L T V l oans i n the country . Pl ai nt i ffs al l ege thatR FC pur chas ed a maj or i tyand perhaps al l of the CB NV a n d GNB T o r i g i n a t e d l o a n s , d e s p i t e k n o wi n g th a tCB NV and G N B T w er e mer e “s tr aw - part i es ” us ed t o funnel or i gi nat i on and t i t l e s ervi ces fee s t o Shum w ay . T he hi gh or i gi nat i on fee s on the pur chas ed l oans gener at ed pr ofi tnotonl yforShum w aybut al s o forR FC ; i n m os tcas es , fee s w er e r ol l ed i nt o the pr i nci pal balance of the l oan s, therebygen erat i ng subst anti al i nter est i ncome. I n 2001, the U ni t ed St at es O ffi ce of the C om ptr ol l erof th e Curr e n c yc o n d u c t e d a n i n v e s t i g a t i o n a n d a u d i to f GN BT, r es ul t i ng i n t he C om ptr ol l er ’ s i m pos i t i on of t i ghtr es tr i ct i ons on the ba nk
. Sho r t l ythe r e a ft e r , Shu mw a y ’ s r e l a t i on s hi p wi th RFC began t o det er i or at e. I n a pr es s r el eas e dat ed M ar ch 28, 2002, R FC announce d t hati tw as no l ongerw i l l i ng t o pur chas e hi gh i nt er es tm or t gage l oans l i ke the ones s ol d byShum w ay . W i thout a p u rc h a se r f

o r its lo a n p ro d u c t an d w ith o u t ad e q u a te r e se rv e s to ma i n t a i n th e l o a n s i n i t s o wn p o r t f o l i o , th e S h u mwa ys c h e me e s s e n tia lly sh u t d o w n b ye a rl y2 0 0 3
. B
. Separ at e C l as s A ct i ons T he C om m uni tyB ank cl as s act i on began a s the fol l ow i ng si x separat e act i on s: K es s l erv. G M A C
- R FC , N o. 03- 0425 ( W
. D
. Pa. ) w as or i gi nal l yfi l ed i n the C our tof C om m on Pl eas of A l l egheny C ou nty , P enn sy l van i a on F ebruary26 , 20 03
. P l ai nti ffs, a cl ass of Penns y l vani a borr ow er s , char ged thatR FC had as s i gnee l i abi l i tyunderPenns y l vani a s t at e l aw forthe “bogus ” l oan o r i g i n a t i o n a n d t i t l e s e r v i c e f e e s c h a r g e d o s t e n s i b l yb yCB NV and G N B T
. O n M ar ch 26, 2003, R FC r emoved t he ca s e t o the U ni t ed St at es D i s tr i ctC our tforthe W es t ern D i s tr i ctof Penns y l vani a, as s ert i ng thatSect i ons 85 and 86 of the N at i onal9 B anki ng A ct( “N B A ”) , 12 U
. S. C
. §§ 85- 86, and Sect i on 521 of the D epos i t oryI ns t i tut i ons D er egul at i on and M onet aryC ontr ol A c t (“ D ID A ” ), 1 2 U .S .C . § 1 8 3 1 d , co m p lete lyp re e m p t an ysta te l aw att empt i ng t o l i m i tthe amountof i nt er es tand fe es a nat i onal orfede r al l yi ns ur ed s t at e- chart er ed bank c oul d char ge. Pl ai nt i ffs d id n o t ch a llen g e re m o v a l. B efor e the K es s l eract i on w as fi l ed ther e w er e fi ve other r el at ed ac t i ons pendi ng i n the s ame D i s tr i ctC our tpr emi s ed on the s ame Shum w ayl endi ng s cheme. I n D avi s v. C B N V , N o. 02- 1 2 0 1 , initia llyf

iled o n M a y1 , 2 0 0 1 , d if f e re n t p lain tiff

s s o u g h t to r epr es entboth a cl as s of Penns y l vani a borr ow er s and a c l as s of n a t i o n wi d e b o r r o we r s . T h e ya s s e r t e d c l a i ms a g a i n s tCB NV, R FC , and Sover ei gn B ank ( a pur chas erof C B N V l oans on the second arym arket ). O n b ehalf of t he P enn sy l van i a cl ass, p lai n ti ff s ass erted that d ef

en d an ts violated P en n sy lvan ia’s m o rt g a g e le n d in g u s u ry st a tu te , 4 1 P a . C o n s . S ta t. § § 1 0 1 e t s e q ., and the Penns y l vani a U nfai rT r ade Pr act i ces and C ons um er P ro tec tio n L a w , 7 3 P a . C o n s. S tat. § § 2 0 1 -1 , et s e q . O n b e h a lf of the nat i onw i de cl as s , the D avi s pl ai nt i ffs as s ert ed a vi ol at i on o f th e f e e sp lita n d d isc lo su re p ro v isio n s o f th e R e a l E sta te S e ttle m e n t P ro c e d u re s A c t ( “ R E S P A ” ), 1 2 U .S .C . § 2 6 0 7 (b ). T he ca s e, or i gi nal l yfi l ed i n a Penns y l vani a s t at e court , w as l at er r emoved bydefe ndant s t o the fe der al courtbas ed on the exi s t ence of fe der al ques t i on j ur i s di ct i on. I n Sabo v. C B N V , N o. 02- 1563, fi l ed on Sept ember11, 2002, i n t he U ni t ed St at es D i s tr i ctC our tforthe W es t ern D i s tr i ct of Penns y l vani a, pl ai nt i ffs comm ence d a put at i ve nat i onw i de cl as s act i on s ui tagai ns tC B N V and R FC as s ert i ng cl ai m s under R E SPA
. I n U l r i ch v. G N B T , N o. 02- 1616, fi l ed on Sept ember 19, 2002, i n t he s ame feder al court , pl ai nt i ffs fi l ed a s i m i l ar put at i ve nat i onw i de cl as s act i on s ui tas s ert i ng cl ai m s under R E S P A , b u t th is o n e n a m e d a s d e f e n d a n ts G N B T a n d R F C
. O ne mont h l at er , on N ovember16, 2002, pl ai nt i ffs fi l ed M athi s v. G N B T , N o. 02- 1999, i n the C our tof C om m on Pl eas of A l l eghenyC ountyas s ert i ng var i ous s t at e l aw m or t gage l endi ng cl ai m s agai ns tG N B T and R FC , i ncl udi ng vi ol at i ons of P enn sy l van i a’s m ort gag e l end i ng usuryst atute, 41 P a. C on s.10 St at
. §§ 101 ets eq. , and the U nfai rT r ade Pr act i ces and C o n s u m e r P ro te c tio n L a w , 7 3 P a . C o n s . S ta t. § § 2 0 1 -1 , e t s e q . O n N o v e m b e r 1 9 , 2 0 0 2 , D e f e n d a n ts re m o v e d th e M a th is c a se to th e f e d e ra l c o u rt b a s e d o n th e d o c tr in e o f c o m p le te p re e m p tio n . A s in K e ss ler , the se p lain tiff s d id n o t ch a llen g e re m o v a l. Fi nal l y , on O ct ober23, 2002, pl ai nt i ffs fi l ed Pi car d v. C B N V , 02- 2000, i n t he C our tof C om m on Pl eas of A l l egheny C ount yagai ns tC B N V , G N B T , and R FC
. O n N ovember19, 2002, D efe ndant s r emoved t he ca s e t o the fe der al courtbas ed on the doctr i ne of c om pl et e pr eempt i on. Pl ai nt i ffs i ni t i al l yfi l ed a m ot i on t o r emand, buton February27, 2003, theyfi l ed an a mend e d c l a s s a c t i on c ompl a i nta s s e r t i ng c l a i ms u nd e rRE SPA and the R acke t eerI nfl uence d and C orruptO r gani zat i ons A ct ( “R I C O ”) , 18 U
. S. C
. § 1962, i n addi t i on t o the var i ous s t at e l aw m o rt g a g e c la im s a s s e rt e d in th e o ri g in a l s ta te c o m p la in t. R
. B ruc e C arlson o f th e P ittsbu rgh , P en n sy lvan ia l aw firm Spect er , Spect er , E vans , & M anogue, P. C
. ( now w i th C ar l s on L ynch) , w as the pr i nci pal pl ai nt i ffs ’ cl as s att orneyi n eac h of the a b o v e a c tio n s , in c lu d in g K e s s le r. C
. C ons ol i dat i on of the C l as s A ct i ons O n J ul y11, 2003, and pr i ort o anydi s covery , the named p l a i n t i f f s i n a l l s i x a c t i o n s , t o g e th e rwi th d e f e n d a n t s CB NV, G N B T and R FC , fi l ed a j oi ntm ot i on forpr el i m i naryappr oval of a p r o p o s e d n a t i o n wi d e c l a s s a c t i o n s e t t l e me n t
. Un d e rth e t e r ms of the s ett l ement , the maxi m um t ot al pay outt o the appr oxi m at el y44, 000 m emberpl ai nt i ff c l as s w as $33 m i l l i on, and the agr eed- upon att orneyfee s w er e $8. 1 m i l l i on. T he s ett l ementpay out s r anged f r om $250 t o $925 perborr ow er dependi ng on the borr ow er ’ s r es i dence and the dat e on w hi ch the l oan w as ent ered. In exch ang e, the b orr ow ers w ere t o rel ease anyand al l s t at e orfede r al cl ai m s thattheym i ghthave r el at i ng t o t hei rs econd mor t gage l oan, i ncl udi ng the r i ghtt o us e a vi ol at i on of fe der al ors t at e l aw as a def ens e t o for ecl os ur e or a n yo th e r a c tio n . S e e , e.g ., 1 5 U .S .C . § 1 6 4 1 (d )(1 ); 8 1 5 Ill. C om p. St at
. § 205/ 6; K an. St at
. A nn. § 16a- 5- 202. T he pr opos ed s ett l ements t at es thati f m or e that
. 5% of the cl as s m ember s opt o u t o f th e se ttl e m e n t cla ss , the se ttl in g d e f e n d a n ts m a yter m in a tePl ai nt i ffs al s o agr eed t o di s m i s s T erryv. C B N V , 02- 2534 2 G V ( W
. D
. T enn. ) , and C at on v. C B N V , C V 02 479286 ( C our tof C om m on Pl eas C uy ahogo C o u n ty , O hi o) , tw o cas es al l egi ng the sa m e f ra u d u len t len d in g sc h e m e a s th e c u rre n t ac tio n . P lain tiff s in T err yand C at on w er e r epr es ent ed bythe s ame couns el as pl ai nt i ffs in th e c o n s o lid a te d a c tio n . 11 th e se ttl e m e n t. 2 O n J ul y17, 2003, l es s than a w eek a ft erthe mot i on w as fi l ed s eeki ng appr oval of the s ett l ement , the D i s tr i ctC our t , i n an O r derthati n al l m at er i al r es pect s w as a verbat i m copyof the pr opos ed O r deroffe r ed bythe s ett l i ng part i es i n thei rJ ul y11, 2003 j oi ntm ot i on, pr el i m i nar i l yappr oved the pr opos ed s ett l ementand cons ol i dat ed al l s i x act i ons l i s t ed above i nt o the K es s l eract i on. T he ca s e w as thus cons ol i dat ed atN o. 03- cv0 0 4 2 5
. T he pl ai nt i ff c l as s w as “condi t i onal l ycert i fi ed” f or se ttl e m e n t p u rp o se s o n ly . T h e O rd e r d e f in e d th e c las s a s:
a ll p e rso n s . . . w h o (a ) e n ter e d in to a lo a n a g re e m e n t w ith C o m m u n ityB a n k o f

N o rth e rn V irg in ia . . . an d /o r G u a ra n ty N at i onal B ank of Tal l ahas s ee . . . ; ( b) w hos e l oan w as s ecur ed bya s econd mor t gage ordeed of trus ton pr opertyl ocat ed i n the U ni t ed St at es ; ( c) w hos e l oan w as pur chas ed byR es i dent i al F u n d in g C o rp o ra tio n . . . a n d , (d ) w h o [ w e re ] n o t . . . m ember [s ] of the cl as s cert i fi ed i n the ac t i on capt i oned B axt er v . G u a ra n tyN a tio n a l B a n k , et a l., C a se N o 0 1 -C V S -0 0 9 1 6 8 , in the G ener al C our tof J us t i ce, Super i orC our tD i vi s i on of W ake C o u n ty, N o rt h C a ro lin a . J A a t 1 3 2
. Si gni fi cant l y , befor e i s s ui ng the J ul y17, 2003 O r der , the D i stri ctC ou rtdid not anal y ze w hetherthe p roposed cl ass s a t i s f i e d th e p r e r e q u i s i t e s f

o ra c l a s s a c t i o n s e tf

o r th i n F e d
. R. C i v. P. 23 ( a) , ( b) ( 3) , or( c) ( 2) , as the C our texpl i ci t l yr es erved s uch ana l y s i s fora s ett l ementhear i ng t o be hel d on N ovember12 14, 2003. T he J ul y17, 2003 O r deral s o pr ovi ded forthe mai l i ng and publ i cat i on of the cl as s not i ce. T he cl as s not i ce di r ect ed bythe D i s tr i ctC our tw as verbat i m the pr opos ed cl as s not i ce of fer ed by the set t l i ng part i es; i tdescri bed the acti on as: A g ro u p o f

C B N V a n d G N B [ T ] b o rro w e rs, w h o a re re f e rre d to as the “N amed Pl ai nt i ffs ” i n thi s N ot i ce, cl ai m i n the Li t i gat i on th a tCB NV a n d GNB [ T ] v i o l a t e d c e r t a i n f e d e r a l a n d s t a t e l a ws i n connec t i on w i th the fe es and i nt er es tchar ged on s econd m or t gage l oans . T hes e cl ai m s ar e as s ert ed aga i ns tthe D e f e n d a n ts C B N V , G N B [ T ] a n d R F C
. J A 137. T he not i ce a l s o pr ovi ded thatal l opt - out s m us tbe re c e iv e d b yth e S e ttle m e n t A d m in is tr a to r b yO c to b e r 1 , 2 0 0 3
. Fi nal l y , cl as s m ember s w er e s peci fi cal l yi ns truct ed thattheym ay dis cuss the set t l em ent w i th thei r ow n att orney s. D
. T he O pt - O utSol i ci t at i ons I n Sept ember2003, aft erthe cl as s not i ce w as m ai l ed, several l aw fi rm s m ai l ed lett ers t o m em bers of t he p l ai nti ff clas s ur gi ng them t o cont actthe l aw fi r m s r egar di ng the above s e ttle m e n t, a n d in s o m e c a s e s u rg in g th e m to o p t o u t o f th e c la s s . T hes e l aw fi r m s and the mem ber s of the cl as s w hom they s ol i ci t ed and w ho opt ed- outar e the A ppel l ant s befor e us (“A pp el l ants ”). T he A pp el l ant l aw fi rm s ar e as foll ow s: W al t ers B ender, St rohbehn & V aughan ( “W al t ers ”) , N o s. 0 3 -42 2 1 , 0 3 -45 0 4 , 0 3 -47 3 2 , 0 4 -10 0 2 - W al t ers has repres ented tw o p l ai nti ff clas ses i n clas s a c tio n su its re late d to th e S h u m w a ysc h e m e . In Ju n e 2 0 0 1 , it fi l ed a class act i on sui ti n Jackso n C ou nty , M i ssouri against C B N V and as s i gnees , al l egi ng vi ol at i on of the M i s s our i Second M or t gage Loans A ct( “M SM L A ”) , M o. R ev. St at
. §§ 408. 231, et seq. T he C i rcui tC ou rtof Jack son C ou ntygrant ed d efen dan t s’ m ot i on t o di s m i s s forfai l ur e t o s t at e a c l ai m on the gr ound that their M S M L A claim fa il ed as a m att er o f law
. T h e M issou ri Co u r to f Ap p e a l s a f

f i r me d
. Av i l a v . Co mm u n i tyBa n k o f N. V a., 1 4 3 S
. N
. 3 d 1 (M o . C t. A p p . 2 0 0 3 ).T he ac tual s ol i ci t at i on i s noti n the appe ndi x. 3 13 O n A p ril 3 , 2 0 0 3 , W a lters f iled a p u tativ e c las s a c tio n in C l ayC ount y , M i s s our i agai ns tG N B T forvi ol at i ons of the M S M L A , assert i ng the sam e cl ai m that i thad assert ed ag ai nst C B N V
. A ft erG N B T r emoved t hatcas e t o the U ni t ed St at es D istri ct C o u rtfo r th e W estern D istri ct of M issou ri , that co u rt hel d t hatpl ai nt i ffs ’ M SM L A cl ai m s ar e pr eempt ed under Sect i ons 85 and 86 of the N at i onal B anki ng A ct
. See Phi pps v. GNB T , No
. 0 3
- 4 2 0
- CV
- W- GAF , 2 0 0 3 WL 2 2 1 4 9 6 4 6 ( W. D. M o. Sept
. 17, 2003)
. T he Ei ghth C i r cui taff i r m ed. Phi pps v. F D IC , _

_ F .3 d __ , 2 0 0 5 W L 1 7 7 3 6 1 1 8 (8 th C ir . 2 0 0 5 ). O n Sept ember18 and 19, 2003, the W al t er s fi r m m ai l ed s ol i ci t at i on l ett er s t o borr ow er s i n M i s s our i and I l l i noi s ur gi ng them t o obj ectt o t he fa i rnes s of the s ett l ementi n the pr es ent act i on butdi d notur ge them t o optout
. I n an af fi davi tt o the D istri ct C o u rt , A tt o rne yJ. M icha el V au g h an o f th e W alt ers f irm decl ar ed thatpr i ort o t he Sept ember18, 2003 l ett er , W al t er s w as as ked t o advi s e and r epr es ents ever al M i s s our i borr ow er s ( as i de fr om thos e i n ei therof the tw o M i s s our i cl as s act i ons ) w ho had obt ai ned l oans fr om G N B T
. A ccor di ng t o W al t er s , a t ot al of ni net een M i s s our i borr ow er s fi l ed opt

- out s . Fol l ow i ng the S e p t e m b e r1 8 l e t t e r , th i r ty- f i v e M i s s o u r i b o rr o w e r s a n d e i g h tyni ne I l l i noi s borr ow er s fi l ed obj ect i ons t o the s ett l ementw i th the D is tr ic t C o u rt
. A t t orney F rankl i n N i x and T he Sharbrough L aw F i rm ( “N i x ”) , N o s. 0 3 -47 2 5 , 0 3 -43 1 9 , 0 3 -48 6 2 , 0 4 -10 3 9 - O n Sept ember17, 2003, A t t orneyN i x m ai l ed a s ol i ci t at i on l ett ert o hundr eds of G eor gi a cl as s m ember s s ett i ng f o rth d e f e n d a n ts’ p o ten tial liab ili tyu n d e r th e H o m e O w n e rsh ip and Equi tyPr ot ect i on A ct( “H O E PA ”) , 15 U
. S. C
. §§ 1601, et se q ., a n d u rg in g c las s m e m b e rs to o p t-o u t o r c o n tac t h im r egar di ng thei rs ett l ementcl ai m s . I ncl uded i n the s ol i ci t at i on w as a N ot i ce of

O pt - O utform l ett erand a Repr es ent at i on & Fee A gr eementcontr act
. T he Sharbr ough L aw Fi r m s ent sol i ci t at i on s t o A l abam a cl ass m em bers. 314 L egg L aw F i rm ( “L egg”) , N os . 03- 4294, 03- 4316, 03- 4 8 3 7 , 0 4 -48 3 8 - M ary l and and Fl or i da borr ow er s r ece i ved s ol i ci t at i on lette rs f ro m L e g g u rg in g c las s m e m b e rs to c o n tac t th e f irm to di s cus s the s ett l ement
. T he or i gi nal l ett erm i s s t at ed the opt

- out dat e as O ct ober15, 2003. A s ubs equentl ett ercorr ect ed the mi s t a k e . I n a De c l a r a t i o n t o th e Di s tr i c tCo u rt , At t o rn e yS c o t tC. B or i s on of the Legg fi r m decl ar ed thatpr i ort o s endi ng outthe sol i ci t at i on l et t ers he h ad ex i st i ng cl i ents w ho had cl ai m s agai nst C B N V
. B or i s on al s o decl ar ed thataft erhe s entthe s ol i ci t at i on le tte rs a p p ro x im a te ly 1 0 0 p e o p le a s k e d h im to a s s e s s th e irc a s e s . A f ter h e re v iew e d th e ir d o c u m e n ts, h e re c o m m e n d e d th a t o n ly for ty - fourcl as s m ember s ( col l ect i vel yknow n as the B adea ux o p t-o u ts) o p t o u t o f

th e se ttl e m e n t an d re tain B o riso n a s th e ir c o u n s e l a g a i n s tCB NV. E del m an, C om bs & L at t urner, L L C ( “E del m an”) , N o s. 0 3 -42 2 0 - E d e lm a n se n t so licita tio n lette rs to b o rro w e rs in Illino is ur gi ng cl as s m ember s t o cont actthem t o as s es s thei rcl ai m s , and t o opt - outof the s ett l ement
. E del m an cl ai m s t o have r ece i ved fi ft een r es pons es t o i t s s ol i ci t at i ons ; thi r t een of w hi ch i tbel i eved had mer i t
. O n O ct ober3, 2003, E del m an fi l ed a s ui ton behal f of these op t -out s i n the N orthern D i stri ctof Il l i no i s i n a case c a p tio n e d S p a n n v . C B N V , N o . 0 3 C 7 0 2 2
. B ythe O ct ober1, 2003 deadl i ne, 435 peopl e had opt ed outof the cl as s act i on s ett l ement
. St ephen Ti l ghm an, the se ttl e m e n t ad m in istra to r, d e c lar e d th a t 4 1 9 o f th o se o p t-o u ts w e re a re s u lt o f

th e s o lic ita tio n le tte rs b yth e a b o v e la w f ir m s . O f t ho se 419 op t -out s, 32 6 w ere s ub m i t t ed b yG eorgi a cl ass m e m b e rs o n o p t-o u t f

o rm s p ro v id e d b yN ix . T h e 4 3 5 to tal o p tout s amount ed t o near l y1% of the t ot al cl as s ; near l ydoubl e the

. 5% tr i ggerthatw oul d al l ow defe ndant s t o t erm i nat e the s e ttle m e n t. E
. T he JointM oti on t o Invali date O pt O uts Fear i ng thatthei rs ett l ementw as i n j eopar dy , on O ct ober 6, 2003, cl as s couns el and def endant s ’ couns el ( the “s ett l i ng p a rties ” ) f

iled a Jo in t M o tio n to In v a lid a te S o licite d O p t-O u tsWe n o t e th a tth e s e c o n d o p t - o u tp e r i o d e n d e d o n l ytwo 4 w ee k s af ter the Jo int M o ti o n w as g ran ted, lea v ing class m em b ers littl e tim e to f

ile th e irs e c o n d o p t- o u ts
.

15 and forC our tA ppr oved N ot i ce t o A ddr es s Fal s e, M i s l eadi ng and D ece pt i ve Sol i ci t at i ons of O pt - O ut s . T he J oi ntM ot i on as s ert ed thatthe above l aw fi r m s had i m pr oper l ys ol i ci t ed and m i sl ed clas s m em bers, thu s i nd ucing t hem t o o pt outof the cl ass se ttl e m e n t. T h e se ttl in g p a rties a sk e d th e C o u rt to in v a lid a te a ll pri or opt- ou tdecis i on s, send a c urat i ve n oti ce t o those cl ass m ember s w ho had opt ed out , and pr eventanycomm uni cat i on betw een A ppel l ant s and cl as s m ember s , exce ptforw r i t t en comm uni cat i ons pr e- appr oved bythe C our t
. T he s ett l i ng part i es ’ br i ef i n s uppor tof the J oi ntM ot i on, as expec t ed, ta rg e te d th e N ix ’s s o lic ita tio n s . T he D i s tr i ctC our tgr ant ed the s ett l i ng part i es ’ j oi nt m ot i on on O ct ober14, 2003. I tdi d s o w i thoutconduct i ng a hear i ng, s ett i ng a br i efi ng s chedul e orotherw i s e al l ow i ng A ppel l ant s anypr act i cal oppor tuni tyt o be hea r d. T he O r derthe D istric t C o u rt e n ter e d o n O c to b e r 1 4 , 2 0 0 3 f o llo w e d v e rb a tim the O r derpr opos ed bythe s ett l i ng part i es , exce ptthatthe D i s tr i ct C our text ended the s econd opt

- outdeadl i ne fr om the O ct ober24, 2003 dat e pr opos ed bythe s ett l i ng part i es , t o N ovember3, 2003. 4 O n O ct ober15, 2003, one dayaft erentryof the O r der i nval i dat i ng the opt

- out s , A ppel l ant s W al t er s , N i x, and Edel m an f iled e m e rg e n c ym o tio n s a sk in g th e D istric t C o u rt to sta yits O ct ober14 O r derand t o r econs i deri t s deci s i on. O n O ct ober16, L e g g su b m itt e d a p ro p o se d c o m m u n ica tio n to its o p t-o u t clie n ts to th e D istric t C o u rt f

o r a p p ro v a l. O n O c to b e r 1 7 , 2 0 0 3 , tw o d a y s a f ter th e m o tio n to r econs i derw as fi l ed, the D i s tr i ctC our tdeni ed the mot i ons . T he b rie f O rd e r sta ted in f

u ll: B efor e the courtar e s ever al m ot i ons t o r econs i der ourO r derof O ct ober14, 2003 [doc. N os . 30, 31,16 3 2 , a n d 3 3 ]
. T h e mo t i o n s a r e DE NI E D. T h e lette rs m a iled b ye a c h o f th e f irm s n a m e d in the O ct ober14, 2003 O r derof C our tt o pl ai nt i ff cl as s m ember s i n thi s cas e w er e di r ects ol i ci t at i ons forpr os pect i ve cl i ent s w hom theyknew t o be re p re se n ted b ya n o th e r la w y e r. If th e re is n o t a rul e of pr ofes s i onal conductthatpr ohi bi t s s uch ac ti v ityin the juri sd ict ion s w h ere thes e law y ers pr act i ce, ther e s houl d be. See gene r al l y , G eor gi ne v. A m chem Produc t s , 160 F. R
. D
. 478[, 495 n. 26] (E .D . P a . 1 9 9 5 ). . . . J A a t 1 4 5
. T he D i s tr i ctC our tappar ent l ytr eat ed the Legg pr opos ed comm uni cat i on as a mot i on t o r econs i der , and deni ed i ti n the s ame O ct ober17, 2003 O r der
. T he C our tther eaf t erdi d not sp e c if ica llya d d re ss w h yit w o u ld n o t p e rm it L e g g to se n d o u t it s propo sed com m un i cat i on s. Pur s uantt o t he O ct ober14, 2003 O r der , “cur at i ve not i ces ” w er e s entt o al l cl as s m ember s w ho had opt ed out d u ri n g the f

ir st op t- o u t period
. T h ese n o ti ce s, w h ich w ere t a i l o r e d t o th e c o mmu n i c a t i o n s s e n tb ye a c h Ap p e l l a n tl a w f i r m, w er e verbat i m copi es of the pr opos ed cur at i ve not i ces s ubm i t t ed bythe s ett l i ng part i es . E ach not i ce s t at ed thatthe C our thas con cl ud ed thatthe “[ A pp el l ant l aw fi rm s’ sol i ci t at i on s] con t ai ned a nu m ber of m i sl eading an d inaccurat e st at em ents ” a n d th e re f

o re th a t th e “ e x c lu sio n re q u e sts re c e iv e d a f ter th e d a te of the l ett erar e al l voi d. ” See, e. g. , A pp. at2062. T he cur at i ve not i ces al s o cont ai ned a numberof det ai l ed bas es forthe fi ndi ng th a t th e A p p e lla n t la w f ir m s ’ s o lic ita tio n s w e re m is le a d in g . Fi nal l y , the cur at i ve not i ces ur ged the r eci pi ent s t o r econs i der th e ir d e c isio n s to o p t o u t. T h e n o tice m a d e c lea r th a t f a ilu re to s ubm i ta s econd opt

- outbyN ovember3, 2003 w oul d w ai ve the c las s m e m b e r’s rig h ts to o p t o u t o f th e se ttl e m e n t. T he pr ovi s i on of the O ct ober14, 2003 O r derthat pr ecl uded the A ppel l antl aw fi r m s fr om comm uni cat i ng w i th any m ember s of the cl as s , exce ptforw r i t t en comm uni cat i ons pr e-17 appr oved bythe D i s tr i ctC our t , i ncl uded a ba ron comm uni cat i on wi th c l a s s me mb e r s wh o h a d r e t a i n e d th e Ap p e l l a n tl a w f i r ms ei therbefor e ordur i ng the fi r s topt - outper i od. Sever al A ppel l ant s decl ar ed i n aff i davi t s pr ovi ded ther eaf t erthatw hen thei rr et ai ned cl i ent s att empt ed t o cont actthem for a dvi ce orfor expl anat i on of the cur at i ve not i ce, theyw er e compel l ed t o r ej ect thei rcl i ent s ’ att empt s atcomm uni cat i on. See, e. g. J A 2056- 57 ( decl ar at i on of B or i s on)
. I n the part i cul arcas es of W al t er s and E del m an, the O ct ober14, 2003 O r derpr event ed them from c o m m u n ica tin g w ith c las s m e m b e rs w h o m th e yre p re se n ted in p e n d i n g l i t i g a t i o n . S e e P h i p p s v . G N B T , N o . 0 3
- 4 2 0
- C V
- WGAF ( W. D. M o . ) ; S p a n n , e ta l
. v . CN BV , No
. 0 3 C 7 0 2 2 ( N. D. Il l)
. O n O c to b e r 2 1 , 2 0 0 3 , W a lters so u g h t p e rm iss io n to s ubm i ta pr opos ed comm uni cat i on i n camer a t o avoi d w ai verof the att orney - cl i entpr i vi l ege. O n O ct ober22, 2003, the D i s tr i ct C o u rt e n ter e d a n O rd e r g ra n tin g W a lters ’ re q u e st to su b m it the p roposed com m un i cat i on t o the C ou rtbu tdir ect ed thati tal so m u st b e se rv e d o n a ll co u n se l. T h e re a f ter , W a lters d id n o t su b m it th e p ro p o se d c o m m u n ica tio n f o r th e C o u rt’s a p p ro v a l. A l l A ppel l antl aw fi r m s exce ptW al t er s compl i ed w i th the baron comm uni cat i ons . W al t er s s entl ett er s byoverni ght del i veryt o t he ni net een M i s s our i opt - out s on O ct ober30, 2003, and i nform ed the D i s tr i ctC our tof thi s act i on on O ct ober31, 2003. T her e w as no s anct i on bythe C our t
. T he r ecor d does not s how w hetherthe l ett er s W al t er s s entw er e the s ame as the pr opos ed comm uni cat i on r efe rr ed t o above. B yN ovember3, 2003, the end of the s econd opt

- out per i od, onl y110 cl as s m ember s had opt ed- outa s econd t i m e. F . T h e O c to b e r 3 1 , 2 0 0 3 C o n f e re n c e C a ll O n O c to b e r 3 1 , 2 0 0 3 , the D istric t C o u rt su a sp o n te c o n v e n e d a c o n f

e re n c e c a ll am o n g p lain tiff s’ c las s c o u n se l, couns el forR FC , C B N V , G N B T , and the C our t( butnot i ncl udi ng A ppel l ant s ’ couns el ) t o addr es s the i s s ue of w hether the D i s tr i ctC our thad s ubj ectm att erj ur i s di ct i on overthe s e ttle m e n t p ro c e e d in g s .18 T he K es s l eract i on had bee n r emoved t o fede r al courton the gr ound thatSect i ons 85 and 86 of the N B A and Sect i on 521 o f th e D ID A co m p let elyp ree m p ted P en n sy lvan ia st ate law u su ry c la im s . S e e B e n e f

ic ia l N a t’ l B a n k v . A n d e rs o n , 5 3 9 U .S . 1 (2 0 0 3 ). U n d e r se ttl e d p re c e d e n t, w h e re th e re is c o m p lete p ree m p ti o n o f a stat e law claim the re su ltis “t o co n v ert c o m p lain ts p u rp o rte d lyb a se d o n th e p re e m p ted sta te la w in to c o m p lain ts s tatin g f

e d e ra l cla im s f

ro m th e ir in c e p tio n .” K risp in v . M a yD e p ’t S to re s C o ., 2 1 8 F .3 d 9 1 9 , 9 2 2 (8 th C ir . 2 0 0 0 ). T he D i s tr i ctC our ti nform ed the part i es t o the phone conver s at i on thathe had e xami ned the or i gi nal compl ai nti n the K es s l eract i on and conc l uded thatpl ai nt i ffs had notas s ert ed any stat e law u su ryclaim s. R athe r, the o n lyclaim s ass erted w ere s t at e l aw char ges of “bogus ” l oan or i gi nat i on and t i t l e s ervi ces fees, w hich und er the C ou rt ’s reas on i ng do no tcon st i tute i nter est a n d th e re f

o re a re n o t p re e m p te d b yf e d e ra l s ta tu te . S e e , e .g ., H a n c o c k v . B a n k o f

A m . , 2 7 2 F
. S u p p . 2 d 6 0 8 , 6 1 0 ( W
. D
. K y. 2003) ( not i ng thatpr eempt i ve for ce of N B A §§ 85 and 86 does notexi s tw i th r es pectt o cl ai m s bas ed on unl aw ful as s es s m entof non- i nt er es ts ervi ce f

ee)
. I n the phone c onfer ence the D i s tr i ct C o u rt sta ted : I have s er i ous r es ervat i ons as t o w hetherornotI have s ubj ect m a tte r j u ri s d ic tio n o v e r t h a t c la im , f o r t h e s im p le re a s o n is th is
. M yunder s t andi ng of thatbank ac ti s thati tr egul at es the a m o u n t o f

in te re s t th a t a b a n k c a n c h a rg e f o r a m o rt g a g e lo a n . H o w e v e r, t h e c la im s h e re h a v e n o th in g to d o w ith in te re s t. T heyar e w i th t hes e bogus fi l i ng fee s . T hos e cl ai m s ar e not i nt er es t
. A nd the ca s es I have r evi ew ed s ai d thatthe N at i onal B a n k in g A c t d o e s n o t p re e m p t th o s e typ e s o f c la im s . A pp. at127. Co u n s e l f

o rRF C r e s p o n d e d th a tth e “ u n d e r l y i n g c l a i ms i n t he St at e courtw er e att acki ng the fe es and i nt er es t s and, ther efor e, [they ] w oul d gi ve r i s e t o s ubj ectm att erj ur i s di ct i on underthe compl et e pr eempt i on doctr i ne. ” A pp 127. W hen the C our tr ej ect ed thi s ar gum ent , couns el then s ugges t ed that perhaps the C our thad j ur i s di ct i on beca us e the K es s l eract i on19 h a d b e e n c o n so lid a ted w ith se v e ra l o th e r a c tio n s w h ich e x p licitly as s ert ed fe der al cl ai m s . T he C our tr es ponded that“the C our tof A ppeal s fr om [s i c] the Thi r d C i r cui thas s ai d pr ettycl ear l ythat s i m pl ycons ol i dat i ng cl ai m s w her e ther e’ s pr operfede r al j ur i s di ct i on w i th one thatther e i s notdoes notgetus ther e. ” A pp. 1 2 8 ; see, e. g . , B row n v . F ran cis, 7 5 F
. 3 d 8 6 0 , 8 6 6 (3d C ir
. 1 9 9 6 ). Faced w i th t hi s per cei ved j ur i s di ct i onal hur dl e, the D i s tr i ctC our tthen s ugges t ed t o the part i es that , as he s aw i t , the ju risd ictio n a l p ro b lem in th e K e ss ler a c tio n c o u ld b e re m e d ied if p l a i n t i f f s ’ c o u n s e l f

i l e d a n a me n d e d c o mp l a i n tu n d e rF e d
. R. C i v. P. 15( c) ( 2) , w hi ch “[ coul d] be dee m ed r el at ed bac k t o [the] o ri g inal fil ing
. ” A p p . at 12 8
. In o ther w o rds, th e D istri ct C o u rt s ugges t ed t o t he s ett l i ng part i es thatpl ai nt i ffs fi l e an a m ended c o mp l a i n te x p l i c i t l ya s s e r t i n g a f e d e r a l c l a i m. O n N o v e m b e r 1 0 , 2 0 0 3 , jus t f o u r d a y s p rio r to th e d a te s chedul ed forthe fa i r nes s hear i ng, pl ai nt i ffs ’ cl as s couns el heede d t he D i s tr i ctC our t ’ s advi ce a nd fi l ed a Consol i dat ed A m ended Cl as s A ct i on C om pl ai ntas s ert i ng vi ol at i ons of R E S P A at C o u n ts I an d II, an d v iolati o n s o f R IC O at C o u n t I II. G
. A ppel l ant s ’ M ot i on t o I nt ervene M eanw hi l e, on O ct ober1, 2003, cert ai n M i s s our i and Illino is o b

jec to rs r e p re se n ted b yA p p e llan t W a lters h a d m o v e d to i nt ervene a s a mat t erof r i ghtunderFed. R
. C i v. P. 24( a) ( 2) and perm i s s i vel yunderFed. R
. C i v. P. 24( b) forthe purpos e of se e k in g a six -m o n th sta yo f th e f a irn e ss h e a rin g in o rd e r to conductdi s coveryi nt o the ade quacyand fa i rnes s of the under l y i ng s ett l ement
. A ppel l antW al t er s al s o fi l ed a Com pl ai nt i n I n t e r v e n t i o n a g a i n s tCBNV, GNBT, a n d RF C a s s e r t i n g c l a i ms un der H O E P A and T ILA on beh al f of the n at i on w i de clas s, cl ai m s und er M S M L A for the sub cl ass of M i ssouri bo rr ow ers , and cl ai m s underthe I l l i noi s I nt er es tA ctforthe s ubcl as s of Il lin o is b o rr o w e rs . T he s ett l i ng part i es fi l ed an oppos i t i on t o the i nt ervent i on o n O ctob er 1 7 , 2 0 0 3
. O n O ctob er 2 1 , 2 0 0 3 , the D istri ct C o u rt deni ed the mot i on t o i nt ervene unde rFed. R
. C i v. P. 24( a) andT he appe al bythe pr opos ed i nt ervenor s fr om the D i s tr i ct 5 C our t ’ s O ct ober 21 O r der , docket ed at N o. 03- 4504 w hi ch r emai ns pendi ng, i s di s m issed b ec aus e the O r derw as nota fi nal ad jud icati o n o f th e i ssu es i n v o lving interve n ti o n an d w as th ere fo re notappea l abl e. See C ar l ough v. A m chem Prods
. , I nc. , 5 F. 3d 707, 7 1 2 -1 4 (3 d C ir . 1 9 9 3 ). T he r enew ed m ot i on t o i nt ervene w as fi l ed af t erthe appe al w as t aken f

r o m the Fi nal O r deri n thi s m att er . W e now have juri sd ict ion to ad d ress the issue o f w h ethe r th e D istri ct C o u rt ’s deni al of i nt ervent i on w as pr oper . St r i ngfel l ow v. C oncerned N eigh b o rs i n A cti o n , 4 8 0 U
. S
. 3 7 0 , 3 8 0 (19 8 7 ).
20 24( b) “w i thoutpr ej udi ce t o i t s r enew al fol l ow i ng the s ubm i s s i on of evi dence fr om obj ect or s atthe Fai rnes s H ear i ng. ” J A at146- 47. A tthe N ovember14, 2003 fai rnes s hear i ng, the pr opos ed i nt ervenor s or al l yr enew ed thei rm ot i on t o i nt ervene a nd on D ece m ber3, 2003 theyr enew ed thatm ot i on byfi l i ng a w r i t t en m ot i on t o i nt ervene. T he D i s tr i ctC our tdeni ed the r enew ed m ot i on on the s ame dayw i thoutexpl anat i on. 5 H
. A p p ell an ts’ R eq u est fo r D isco v ery I n ear l yN ovember2003, A ppel l antW al t er s s erved s ever al depos i t i on r eques t s di r ect ed t o s om e of the named p lain tiff s a n d c las s c o u n se l an d su b p o e n a e d th e sa m e p a rties to a p p e a r a t th e N o v e m b e r 1 4 , 2 0 0 3 f a irn e ss h e a rin g in a n e f f o rt to es t abl i s h t he i nadequa cyof the s ett l ement
. O n N ovember5 and then on N ov em ber 10, 2003 , the set t l i ng part i es m ov ed to qua sh the depos i t i on r eques t s and w i tnes s s ubpoenas , and r eques t ed thatthe D i s tr i ctC our tor derthatno others ubpoenas be al l ow ed nordi s coveryt aken. O n N ovember10, 2003 ( the daythe s econd m ot i on w as fi l ed) , the D i s tr i ctC our tgr ant ed thes e mot i ons i n an O r derw hi ch, w i th t he exc ept i on of a r edac t ed port i on r egar di ng att orneys anct i ons , w as verbat i m the O r derpr opos ed bythe s ett l i ng part i es . Speci fi cal l y , the N ovember10 O r derpr ovi ded that“[t ] he M i s s our i and I l l i noi s O bj ect or s , thei ratt orney s , and anyper s on act i ng on thei rbehal f [c oul d] noti s s ue anyfur ther di s coveryr eques t s ors ubpoenas ” w i thoutpr i orappr oval of the21 C our t ; thatA ppel l ant s coul d notpr es entt es t i m onyof any w i tnes s atthe fi nal fai r nes s hear i ng w i thoutpr i orappr oval of the C our t ; and thatal l pr i ors ubpoenas purpor t i ng t o r equi r e a w i tnes s orpartyt o att end and t es t i fyatthe fi nal fai rnes s hear i ng w e re th e re b yv o id . J A 1 5 0 -5 1
. I
. T he Fai r nes s H ear i ng O n O ct ob er 1, 20 03 , the o ri ginal dead l i ne fo r opt -out s, s ever al A ppel l ant s fi l ed N ot i ces of O bj ect i ons t o the Sett l ement A gr eementcl ai m i ng thatthe condi t i onal l ycert i fi ed cl as s fai l ed t o m eetthe r equi r ement s of Fed. R
. C i v. P. 23 and thatthe s ett l ementw as nei therfai rnorr eas onabl e. O n N ovember14, A p p e llan t W a lters f

iled a su p p lem e n t to a n d a m e n d m e n t o f its obj ect i ons t o t he s ett l ementagr eement , ar gui ng, i nt eral i a, that the ave r age RE SPA cl ai m bei ng r el eas ed w as w or th $14, 042. 95 a n d th a t th e a v e ra g e H O E P A c laim b e in g re lea se d w a s w o rth $ 2 0 ,1 0 8 .7 6 . O n th e s a m e d a y , it s u b m itte d a n “ O f f e r o f P ro o f ,” det ai l i ng the M i s s our i and I l l i noi s obj ect i ons t o the pr opos ed se ttl e m e n t. In a d e c lar a tio n d a ted N o v e m b e r 1 2 , A tto rn e yN ix c l a i me d th a tth e s e t t l e me n twa s r e l e a s i n g “ o v e ra BI L L I ON D O L L A R S o f

stric t li a b ili tyT ru th -in -L e n d in g d a m a g e s o w e d to 44, 000 C l as s m ember s , w ho ar e al l vi ct i m s of pr edat oryl endi ng s ubj ectt o t he fe der al H om e O w ner s hi p and Equi tyPr ot ect i on A c t ( “ H O E P A ” ) ( 1 5 U .S .C . § 1 6 3 9 , e t s e q .).” J A a t 1 9 0 9
. A ttac h e d to th e N ix d e c lar a tio n w a s a sp re a d sh e e t d e tailin g h is est i m at ed T ILA dam ages calcul at i on s for the clas s. T he D i s tr i ctC our thel d a fa i rnes s hear i ng on N ovember 14, 2003, and hea r d or al ar gum ent s fr om both cl as s couns el and obj ect ors. Im m ediat el ypri or t o the fai rness heari ng , there w as a dis cussi on i n the D i stri ctC ou rt ’s cham bers betw een class c o u n s e l a n d th e C o u rt . A p p e lla n ts ’ c o u n s e l w e re n o t in v ite d
. T he fol l ow i ng col l oquyatthatchamber s m eet i ng i s i n the r ecor d: C arl son [c ou nsel for sett l i ng cl ass] : W e are i n the process

of pr epar i ng pr opos ed fi ndi ngs of fa ctand c o n c lu sio n s o f

law w h ich w e w o u ld su b m it to Y o u r H o n o r w ith th e C o u rt’s a p p ro v a l.22 C ou rt : Y es. C a r l s o n : T h a t ’ s th e p r i m a ry — C o u r t : I h a v e t o w r i t e a n o p i n i o n a n yw a y — C a rlso n : R ig h t. C o u rt:

— o n th is. B u t y o u w a n t to su b m it

so m e f in d in g s o f

f a c t th a t I w o u ld a d o p tb a s i c a l l y? C ar l s on: T hatw oul d be ourpr efe r ence , Y our

H o n o r. C o u rt : H av e y o u p rep are d a f inal o rde r? C ar l s on: W e i ncl uded a f i nal or deri n our m o tio n f o r p re lim in a rya p p ro v a l. C our t : O kay
. A r e y ou s at i s fi ed i tw i l l m eet

e v e ryth i n g w e n e e d e v e n a f t e rt o d a y? C ar l s on: W i th the addi t i on of the fi ndi ngs and

c o n c l u s i o n s th a twe c o n t e mp l a t e , we bel i eve thati t ’ s per fec t l yadequa t e. C ou rt : H ow l on g d o y ou need t o h ave these

concl us i ons and fi ndi ngs s ubm i t t ed?

*** C our t : W e w i l l go thr ough the hea r i ng, and

y ou have a w eek t o t en day s t o get the r es tof thi s s tuff i n. C ar l s on: I thi nk w e ca n have i ti n bynext

F ri d ay , Y o u r H o n o r. C our t : O kay
. T hen I w i l l , as s um i ng theyA ppel l ant s cont end t hat FD I C s houl d notbe s ubs t i tut ed for 6 G N B T as th e true p artyin interest be ca u se G N B T w as n ev er a n am ed d ef

en d an t i n the K essler a cti o n , N o 0 3 -04 2 5
. T h eyare corr ectthat the D i s tr i ct C our t ’ s J ul y 17, 2003 cons ol i dat i on of the f iv e o th e r c las s a c tio n s, w h e re G N B T w a s a n a m e d d e f e n d a n t, i n to the K es s l eract i on does notm ake G N B T a partyt o the cons ol i dat ed a c tio n . S e e C e lla v . T o g u m C o n stru c teu r E n se m leie r E n In d u strie A l i m i entai re, 17 3 F
. 3d 90 9, 91 2 (3d C i r. 19 99 ) ( n o tin g th atcase cons ol i dat i on “does notm er ge the s ui t s i nt o a s i ngl e ca us e, or 23 ar e fi ne, I w i l l go ahea d and adopt them and putm yr eas ons for appr ovi ng the s ett l ementi n a w r i t t en me mo r a n d u m. J A 1 9 7 3 -7 4 , 1 9 7 6
. T he D i s tr i ctC our tdi d i ndeed appr ove the pr opos ed se ttl e m e n t in a F in a l O rd e r d a ted D e c e m b e r 4 , 2 0 0 3 . F iled w ith the O rde r w as a M em o ran d u m p rep are d b ythe D istri ct C o u rt and Fi ndi ngs of Factand C oncl us i ons of Law pr epar ed bythe s ett l i ng part i es . A l though the Fi ndi ngs of Factand C oncl us i ons o f L aw w ere n o t si g n ed b ythe D istri ct C o u rt , the C o u rt ’s m emora ndum s t at ed i n a footnot e that“[u] pon i ndepende nt r evi ew of the r ecor d i n thi s cas e, the courtfi nds thatthe pr opos ed fi ndi ngs and conc l us i ons ar e ful l ys uppor t ed bythe re c o rd a d o p ted b yth e c o u rt a n d in c o rp o ra ted in to th is m emora ndum byr efe r ence as i f ful l ys etfor th. ” J A at176. J
. Th e F DI C a s Re c e i v e rf o rGNBT O n M ar ch 12, 2004, aft erthe eve nt s s etfor th above, the C om ptr ol l erof the C urr encydecl ar ed G N B T t o be uns afe and uns ound, and appoi nt ed the Feder al D epos i tI ns ur ance C orpor at i on ( “FD I C ”) as r ece i ver . T he FD I C , on M ar ch 29, 2 0 0 4 , as k e d to b e su b stitu ted f o r G N B T a s th e tru e p a rtyin in ter e st. T h is c o u rt g a v e th e F D IC lea v e to in ter v e n e in th is appea l and gr ant ed the FD I C ’ s r eques tfora ni netydays t ayfr om th e d a te o f

its a p p o in tm e n t a s re c e iv e r. S e e 1 2 U .S .C . § 1 8 2 1 (d)(1 2 )(A )(i i)
. 6c h a n g e the ri gh t s of t he p art i es, or m ake those w ho are part i es in one s ui tpart i es i n another ”) ( emphasi s added) ( i nt ernal ci t at i ons and quot at i ons om i t t ed)
. H ow ever , on N ovember10, 2003, pl ai nt i ffs ’ cl as s couns el fi l ed an amended cons ol i dat ed compl ai nt lis tin g G N B T a s a d e f e n d a n t
. T h u s , p u rs u a n t to 1 6 U .S .C . § 1821( d) ( 2) , t he FD I C s ucce eded t o al l “r i ght s, ti tl es , pow er s , and p r i v i l e g e s o f [ GNB T , ] th e i n s u r e d d e p o s i t o ryi n s t i tu t i o n , ” a n d we gr antthe F D IC ’s m o t i on t o be s ubs t i tut ed forG N B T as the true p a rtyin in ter e st. 24 I I . J UR I S DI CT I ON W e mustcons i deratthe out s etA ppel l ant s ’ ar gum entthat the D i s tr i ctC our tl acke d s ubj ectm att erj ur i s di ct i on overthe or i gi nal K es s l eract i on, and thatas a r es ul tw e mustvaca t e the s e ttle m e n t a n d d ir e c t r e m a n d to th e P e n n s y lv a n ia s ta te c o u rt
. A s th e D istric t C o u rt re c o g n ize d , the re w a s n o d iv e rsityin the or i gi nal K es s l eract i on and no fe der al ques t i on w as pl ed on the fa ce of

the compl ai nt
. I ti s w el l s ett l ed that“[o] nl ys t at ecourtact i ons thator i gi nal l ycoul d have be en fi l ed i n fede r al courtm aybe r emoved t o fede r al courtbythe def endant
. ” C at erpi l l arI nc. v. W i l l i ams, 482 U
. S. 386, 392 ( 1987)
. U nder the w el l

- pl eade d compl ai ntrul e, ther e ca n be no r emoval on the bas i s of a f

eder al ques t i on unl es s the fe der al l aw underw hi ch the claim arises is a d ir ec t and esse n ti al elem en t of the p lai n ti ff ’s ca se. S ee F ran ch ise T ax B d
. o f C al. v . C o n str
. L ab o rers V a c a tio n T ru st f

o r S . C a l., 4 6 3 U .S . 1 , 1 0 -1 2 (1 9 8 3 ); L o u isv ill e & N a s h v ille R .R . C o . v . M o ttle y , 2 1 1 U .S . 1 4 9 (1 9 0 8 ). H ow ever , the compl et e pr eempt i on doctr i ne i s an “i ndepende nt c o ro lla ry” to th e w e ll- p le a d e d c o m p la in t ru le . C a te rp illa r I n c ., 4 8 2 U .S . at 3 9 3 . In C a terp ill a r, th e S u p re m e C o u rt sta ted : O n occa s i on, the C our thas concl uded thatthe pr ee m p tiv e f

o rc e o f a sta tu te is so e x tra o rd in a ryth a t it c o n v e rts a n o rd in a rysta te c o m m o n -la w c o m p lain t in to o n e sta tin g a f

e d e ra l cla im f

o r p u rp o se s o f

th e w e llpl eade d compl ai ntrul e. . . . O nce a n ar ea of s t at e l awT he K es s l ercompl ai ntchar ged, i n es s ence : 7 C ountI - B r eac h of C ontr act : the fr audul entor i gi nat i on fee s r es ul t ed i n a contr actual br eac h of the l oan agr eement C ountI I - B r eac h of C ontr act : the fr audul entfee s fort i t l e s ervi ces re su lted in a c o n tra c tu a l b re a c h o f th e lo a n a g re e m e n ts C ountI I I - C ontr actV oi d: thatthe “s ubt er fuge w as t o ci r cumvent the Penns y l vani a Seconda ryM or t gage Loan A ct( and other a n a lo g o u s sta te law s),” m a k in g th e a g re e m e n ts vo id a g a in st p u b lic p o licy . P lain tiff

s d o n o t a lleg e a v io latio n o f th e P e n n sy lv a n ia SecondaryM or t gage Loan A cti t s el f C ountI V - C onver s i on- that the paym ent of t he above m ent i oned f e e s “ d e p r i v e d P l a i n t i f

f s a n d th e C l a s s o f

a r i g h ti n p r o p e r ty” re su lti n g in a c o m m o n law c o n v e rsio n c laim C ount V - Unj u s t En r i c h me n t - th a t RFC, th e p u r c h a s e r o f t he 25 h a s b e e n c o m p lete lyp re -e m p ted , an yc laim p u rp o rte d ly bas ed on thatpr e- empt ed s t at e l aw i s cons i der ed, fr om i t s i ncept i on, a fe der al cl ai m , and ther efor e ar i s es under f e d e r a l l a w. I d. ( i nt e r na l qu ot a t i on s a nd c i t a t i on s omi t t e d) ; s e e a l s o I n r e U
. S. H eal thcar e, I nc. , 193 F. 3d 151, 161 ( 3d C i r . 1999) ; Schm el i ng v. N O R D A M , 97 F. 3d 1336, 1342 ( 10th C i r . 1996) ( s t at i ng that compl et e pr eempt i on i s “notas a crude meas ur e of the br eadth of the pr eempt i on ( i n t he or di narys ens e) of a s t at e l aw bya fe der al l aw , butr atheras a des cr i pt i on of the s peci fi c s i tuat i on i n w hi ch a fe der al l aw notonl ypr eempt s a s t at e l aw t o s om e degr ee but al s o s ubs t i tut es a fe der al caus e of a ct i on forthe s t at e ca us e of a c tio n , the re b ym a n if

e stin g C o n g re ss ’s in ten t to p e rm it rem o v al”). R FC r emoved t he K es s l eract i on on the gr ound that p lain tiff s’ c h a rg e s o f

“ b lata n tlyf

ra u d u len t” o rig in a tio n a n d tit le s ervi ces fee s , ar e compl et el ypr eempt ed by§§ 85 and 86 of the

7l oans , w as unj us t l y enr i ched byknow i ngl yacc ept i ng and r et ai ni ng the monet arybenef

i t s of the unl aw ful conduct C ountV I - M oney H ad and R ece i ved - t hatthe fr audul entconduct prohibi t ed R F C i n eq uity and go od con sci ence f rom keep i ng these i l l

- got t en gai ns of the l oans C ountV I I - Fr aud

- that the s cheme t o extr actunl aw ful s ett l ement fee s w as pr edi cat ed on fa l s e r epr es ent at i ons upon w hi ch the pl ai nt i ffs and cl as s m ember s pr es um pt i vel yr el i ed C ountV I I I - Penns y l vani a’ s U nfai r T r ade Pr act i ces and C ons um er Pr ot ec ti on L aw - thatthe conduc tvi ol at ed s t at e cons um er p ro tec tio n sta tu te C ountI X - C ons pi r acy- the conduc tcons t i tut ed a c om m o n l aw c o n s p i r a c y. A pp. at622- 33. S ect i on 85 provides: 8 R at e of i nt er es ton l oans , di s count s and pur chas e A nyas s oci at i on m ayt ake, r ece i ve, r ese rve, and charge o n an yl oan or di scoun tm a d e , or upon anyno t es, bi l l s of exc hange, orother evi dence s of debt , i nt er es tatthe r at e al l ow ed b y the l aw s of the St at e, T err i t ory , orD i s tr i ct w h e re th e b a n k is lo c a ted , o r a t a r a te o f 1 p e r c e n tu m in exce s s of the di s countr at e on ni nety - daycomm er ci al paper i n eff ectatthe Feder al r es erve bank i n the Feder al r es erve di s tr i ctw her e the ban k i s l ocat ed, w hi cheve rm aybe the gr eat er , and no more , exce pt that w her e bythe l aw s of any St at e a di ffe r entr at e i s l i m i t ed for b an ks or gani zed unde r s t at e l a ws , th e r a t e s o l i mi t e d s h a l l b e a l l o wed for as s ociat i ons or gani zed orexi s t i ng i n anys uch St at e under 26 NB A a n d b y§ 5 2 1 o f

th e DI DA. In B en ef

ici al N at’l B an k v . A n d erso n , 5 3 9 U
. S
. 1 (20 0 3 ), the Supr eme C our tdefi ni t i vel yhel d that§§ 85 and 86 of the 8 9thi s chapt er . W hen no r at e i s fi xed by the l aw s of the St at e, or T err i t ory , or D i s tr i ct , the bank mayt ake, r ece i ve, r es erve, orchar ge a r at e not ex ce ed ing 7 percentum , or1 per centum i n exce s s of the di s countr at e on ninety - day c o m m e rc ial p a p e r in e f f e c t at th e F e d e ra l re se rv e b a n k in the Feder al r es erve di s tr i ctw h ere the bank i s l ocat ed, w hi cheve r m ay be the gr eat er , and s uch i nt er es t m aybe t aken i n advance, r eckoni ng the day s forw hi ch the not e, bi l l , orotherevi dence of debthas t o run. T he maxi m um amount of i nt er es tor di s count t o be char ged ata br anch of an as s oci at i on l ocat ed out s i de of the St at es of the U ni t ed S tate s a n d th e D is tr ic t o f C o lu m b ia s h a ll b e a t th e ra te a l l o w e d b y th e l a w s o f

th e c o u n try, t e rr i t o ry, d e p e n d e n c y, pr ovi nce, dom i ni on, i nsu larpos s es s i on, orotherpol i t i cal s ubdi vi s i on w her e t he bra nch i s l ocat ed. A nd the pur chas e, di s count , or s al e of a bona fi de bi l l of exc hange, pay abl e at anotherpl ace than t he pl ace of such pur chas e, di s count , or s al e, atnot m or e t han the curr entr at e of e xchange fors i ght dr aft s i n addi t i on t o the i nt er es t , s hal l notbe cons i der ed as tak in g o r re c e iv in g a g re a ter ra te o f in ter e st. 12 U
. S. C
. § 85. S ect i on 86 provides: 9 U s ur i ous i nt er es t ; penal tyfort aki ng; l i m i t at i ons T he t aki ng, r ece i vi ng, r es ervi ng, orchar gi ng a r at e of i nt er es t gr eat er than i s al l ow ed by s ect i on 85 of thi s t i t l e, w hen know i ngl ydone, s hal l be dee m ed a fo rfei tur e of the ent i r e i nt er es t w hi ch t he not e, bi l l , orotherevi dence of debt carr i es w i th i t , orw hi ch has been a gr eed t o be pai d ther eon. I n the ca s e the gr eat err at e of i nt er es thas bee n p aid, the per s on byw hom i thas been pa i d, orhi s l egal rep rese n tat ives , m ayrec o v er b ac k , in an ac ti o n in the n ature o f a c tio n o f

d e b t, tw ice th e a m o u n t o f th e in ter e st th u s p a id fr om the as s oci at i on t aki ng orr ece i vi ng the s ame: Pr ovi ded, T hats uch act i on i s comm ence d w i thi n tw o y ear s fr om the t i m e the us ur i ous tr ans act i on occurr ed.
2712 U
. S. C
. § 86. S ect i on 52 1 p rovi des: 10 ( a) I nt er es tr at es I n or dert o pr eventdi s cr i m i nat i on agai ns tSt at e- chart er ed i ns ur ed depo s i t oryi ns t i tut i ons , i ncl udi ng i ns ur ed s avi ngs b a n k s, . . . w it h r e s p e c t to in ter e sts ra tes , . . . su c h S tate bank[s ]
. . . m ay , notw i ths t andi ng any St at e const i tut i on or sta tu te w h ich is h e re b yp re e m p ted f o r th e p u rp o s e s o f

th is sec ti o n, t ake, r ece i ve, r es erve, and cha r ge on anyl oan or di s countm ade, orupon anynot e, bi l l of exc hange, orother evi dence of debt , i nt er es tata r at e o f notm or e than 1 per centum i n exce s s of the di s co untr at e on ni nety - day c o m m e rc ial p a p e r in e f f e c t at th e F e d e ra l R e s e r v e b a n k in th e F e d e ra l R e se rv e d istric t w h e re su c h S tate b a n k
. . . is l ocat ed oratthe r at e all o w ed bythe l aw s of the St at e, t err i t ory , ordi s tr i ctw her e the bank i s l ocat ed w hi cheve r m ayb e g rea ter. 1 2 U .S .C . § 1 8 3 1 d (a ) ( e m p h a s is a d d e d ). 28 N B A compl et el ypr eempts t at e l aw us urycl ai m s agai ns tnat i onal b a n k s. T h e C o u rt sta ted : B eca us e §§ 85 and 86 pr ovi de the exc l us i ve ca us e of a ct i on for [us ury ]
. . . cl ai m s , ther e i s , i n s hor t , no s uch thi ng as a s t at el aw cl ai m of us uryagai ns ta nat i onal bank. E ven though the c o m p lain t m a k e s n o m e n tio n o f f e d e ra l law , itu n q u e stio n a b ly a n d u n a m b ig u o u s ly cl a im s th a t p e titio n e rs v io la te u s u ry la w s . T hi s caus e of a ct i on agai ns tnat i onal banks onl yar i s es under f e d e ra l la w a n d c o u ld , th e re f o re , b e re m o v e d u n d e r § 1 4 4 1
. 5 3 9 U .S . at 1 1 . In o th e r w o rd s, a c laim o f u su rya g a in st a n a tio n a l b a n k su c h a s G N B T p u rp o rtin g to b e g ro u n d e d in sta te la w is in re a lity a f

e d e ra l c la im
. L ik e w ise , § 5 2 1 o f

D ID A c o m p lete lyp re e m p ts a n ysta te

10 l aw at t em pti ng t o li m i tthe am ou nt of i nter estand fees a fede r al l yi ns ur ed- s t at e cha r t er ed bank c an cha r ge. See29 G ree n w o o d T rust C o . v . M ass., 9 7 1 F
. 2 d 8 1 8 , 8 2 6 -28 (1st C ir
. 1992)
. N otonl ydoes § 521 cont ai ns an expr es s pr eempt i on cl aus e, “notw i ths t andi ng anySt at e cons t i tut i on ors t atut e w hi ch i s h e r e b yp r e e mp t e d f

o rth e p u rp o s e s o f

th i s s e c t i o n , ” 1 2 U. S
. C. § 1831d( a) , butthe s t atut e al s o i ncorpor at es verbat i m the l a n g u a g e o f

§ 8 5 o f th e NB A. Wh e n Co n g r e s s b o rr o ws l anguage fr om one s t atut e and i ncorpor at es i ti nt o a s econd s t atut e, the l anguage of the tw o act s or di nar i l ys houl d be i nterpret ed the sam e w ay . S ee M oral es v. T rans W orl d A i rl i nes, I nc. , 504 U
. S. 374, 383- 84 ( 1992) ; I nger s ol l

- R and C o. v. M cC l endon, 498 U
. S. 133, 144- 45 ( 1990) ; O s carM ay er& C o. v . E v an s, 4 4 1 U
. S
. 7 5 0 , 7 5 6 (19 7 9 ). I n l i ghtof thi s pr ece dent , w e mustexami ne the K es s l er compl ai ntt o det erm i ne i f i tal l eged s t at e l aw cl ai m s of unl aw ful i nt er es tbya nat i onal l yors t at e cha r t er ed bank. W e ca n s etas i de the i s s ue r ai s ed bythe D i s tr i ctC our tdur i ng the O ct ober31, 2003 confe r ence cal l ( w hetherthe fr audul entor i gi nat i on and t i t l e s ervi ce f

ees al l eged bypl ai nt i ffs cons t i tut e “i nt er es t ” under the N B A o r th e D ID A ) an d fo cu s instead o n tw o m o re s ubs t ant i al , and ul t i m at el ydet erm i nat i ve, i s s ues . Fi r s t , the K e ss ler c o m p lain t as se rte d n o c laim s a g a in st a n a tio n a l o r sta te chart er ed fe der al l yi ns ur ed bank. R ather , onl yR FC ( and not C B N V orG N B T ) w as named as a def endanti n the or i gi nal act i on . S ee, e. g. , C olor ado ex rel
. S al zar v. A ce C ash E xp res s, I nc. , 188 F. Supp. 2d 1282, 1285 ( D
. C ol o. 2002) ( “The C o m p lai n t stri ctl yis ab o u t a no n -ba n k ’s vio lat ion o f state law
. It a lle g e s n o c la im s a g a in s t a n a tio n a l b a n k u n d e r t h e N B A .” ). S e c o n d , the c o m p lain t as se rte d n o u su ryc laim s a g a in st a n yp a rty u n d e r P e n n s y lv a n ia s ta te la w . Sect i ons 85 and 86 of the N B A and Sect i on 521 of the D ID A a p p lyo n lyto n a tio n a l an d sta te c h a rte re d b a n k s, n o t to n o n -b a n k p u rc h a s e rs o f s e c o n d m o rt g a g e lo a n s s u c h a s R F C
. See, e. g. , W ei nerv. B ank of K i ng of Prus s i a, 358 F. Supp. 684, 687 ( E
. D
. Pa. 1973) ( s t at i ng thatN B A “r egul at es nat i onal banks an d o n lyn ati o n al ba n k s, w h ich c an b e ide n ti fied b ythe w o rd
‘ nat i onal ’ i n t hei rname”)
. Sever al court s have e xpl or ed the iss u e o f re m o v a l in c a se s in v o lv in g c o m p lain ts v e rysim ilar to that fo u n d in the p rese n t case an d fo u n d rem o v al i m p rop er.30 I n Fl ow er s v. E Z Paw n O kl ahoma, I nc. , 307 F. Supp. 2d 1191 ( N
. D
. O kl a. 2004) , pl ai nt i ffs br oughtO kl ahoma st at e- l aw cl ai m s of us uryand fr aud aga i ns ttw o defe ndant s , al l egi ng that th o se d e f e n d a n ts h a d “ [ e n ter e d ] in to a ‘sh a m ’ re latio n sh ip w ith C ou ntyB ank of R eho bo th B each, D el aw are . . . for the p urpose of cl ai m i ng fede r al pr eempt i on and eva di ng s t at e us ury , fr aud a n d c o n su m e r p ro tec tio n law s.” Id . at 1 1 9 6 . C o u n tyB a n k itse lf w as notnamed as a def endanti n the s t at e courtact i on. T he di s tr i ctcourtdeni ed r emoval , s t at i ng that“[n] o cl ai m s have be en br oughtagai ns tC ount yB ank i n thi s l aw s ui t
. T he s t at e ac t i on cl ai m s ar e as s ert ed aga i ns tE Z Paw n and EZ C orp, nei therof w hi ch i s a s t at e- chart er ed, fede r al l yi ns ur ed ( ornat i onal ) bank. ” Id . a t 1 2 0 4
. Li ke w i s e , i n Col or a do v. A c e Cas h Exp r e s s , I nc . , 18 8 F. Supp. 2d 1282 ( D
. C ol o. 2002) , pl ai nt i ffs as s ert ed s t at e l aw cl ai m s agai ns ta non- bank che ck ca s hi ng bus i nes s , w hi ch off er ed anci l l aryl oans m ade bya nat i onal bank. T he nat i onal bank w as n o t nam ed as a d ef

en d an t i n the c o m p lai n t. T h e d istri ct co u rt den i ed d efen dan t s’ at t em pt atrem ov al , st at i ng that “i n thi s case D e f e n d a n t an d th e n a tio n a l b a n k a re se p a ra te e n tit ies a n d th e ir r el at i ons hi p does notgi ve r i s e t o compl et e pr eempt i on underthe N B A
. . . . T h e C o m p lai n t stri ctl yis ab o u t a no n -ba n k ’s vi ol at i ons of s t at e l aw . I tal l eges no cl ai m s agai ns ta nat i onal bank underthe N B A
. ” I d. at1285. T he fa ct s i n t he K es s l eract i on ar e di s t i ngui s habl e fr om K ri sp in v
. M ayD ep ’tS tores C o . , 2 1 8 F
. 3 d 9 1 9 (8th C ir
. 2 0 0 0 ), w h e re th e h o ld e rs o f

a d e p a rtm e n t sto re ’s c re d it ca rd s b ro u g h t a c la s s a c tio n a lle g in g v io la tio n o f M is s o u ri s ta te u s u ry la w s . A l though t her e w er e no cl ai m s agai ns ta nat i onal ors t at echart er ed bank, the l oans w er e i s s ued bya nat i onal bank, w hi ch w as a w hol l yow ned s ubs i di aryof the depa r t m ents t or e. T h ere fo re, th e E igh th C ir cu ith eld th at rem o v al w as p rop er, not i ng thatal though t he cr edi tagr eementexi s t ed betw een cus t om er s and the depa r t m ents t or e, i tw as the nat i onal bank that
“ p r o c e s s [ e d ] a n d s e r v i c [ e d ] c u s t o me ra c c o u n t s , a n d s e t [ ] t e r ms [ s u c h ] a s in te re s t a n d la te f e e s .” Id . a t 9 2 4
. K r i s pi n i s i nappl i cabl e t o K es s l erw her e, des pi t e the31 pr ovi s i on i n t he l oan agr eementthatl oans w er e made thr ough a nat i onal ors t at e- chart er ed bank ( C B N V orG N B T ) , the l oans w ere , in f

ac t, m ad e a n d serv iced b yS h u m w ay , a n o n -de p o sit o ry i ns t i tut i on. T hes e l oans w er e then boughtbyR FC ( the named defe nd ant) , al so a no n-bank , i n the second arym arket
. B ecause R F C , C B N V , and G N B T are ent i rel yseparat e enti t i es, plai nti ffs’ s t at e l aw cl ai m s agai ns tR FC coul d notbe pr eempt ed bythe N B A o r b yth e D ID A
. M or eover , the or i gi nal K es s l ercompl ai ntfai l ed t o pl ead a n ysta te la w u su ryc laim s, a lleg in g o n lya se rie s o f o th e r sta te l aw cl ai m s thatar e notpr eempt ed bythe N B A , D I D A , orany otherfede r al l aw . See A ppendi x of Exhi bi t s , E x. 1 at33 (K essler c o m p lai n t) (“T h e c lai m that P lai n ti ff an d the C lass are a ss e rtin g in th is C o u n t [ C o u n t III] is p re d ica ted u p o n sta te c o m m o n law a n d th is c laim is e x p re ss lyn o t se e k in g to a ss e rt a p ri v ate righ t of

ac ti o n u n d er the P en n sy lvan ia S ec o n d ary M or t gage Loan A ctoranyothers t atut oryl aw . ”)
. I tfol l ow s that rem o v al w as im p rop er. T hi s does notend ouri nqui ry . T he Supr eme C our thas hel d t hat

w her e af t err emoval a ca s e i s tr i ed on the mer i t s w i thout o b jec tio n a n d th e f

e d e ra l co u rt e n ter s ju d g m e n t, th e iss u e in s ubs equentpr ocee di ngs on appea l i s notw hetherthe ca s e w as p ro p e rlyre m o v e d , b u t w h e th e r th e f e d e ra l d istric t co u rt w o u ld h a v e h a d o rig in a l ju risd ictio n o f th e c a se h a d it b e e n f

iled in th a t co u rt. G rub b s v . G en . E lec. C red itC o rp., 4 0 5 U
. S
. 6 9 9 , 7 0 2 (19 7 2 ); s e e a ls o K n o p v . M c M a h a n , 8 7 2 F .2 d 1 1 3 2 , 1 1 3 8 (3 d C ir . 1 9 8 9 ). T he s ame r es ul tm ayobt ai n w her e a c as e has been im p ro p e rlyre m o v e d b u t th e o rig in a l co m p lain t is su b se q u e n tly amended t o s t at e a w el l

- pl eade d fede r al ques t i on. See Pegr am v. H erd ri ch , 5 3 0 U
. S
. 2 1 1 , 2 1 5 n . 2 (20 0 0 ) (st ati n g that p lai n ti ff ’s amended compl ai nt“al l eged ER I SA vi ol at i ons , overw hi ch the fede r al court s have j ur i s di ct i on, and w e ther efor e have juri sd ict ion reg ard less o f th e c o rrectne ss o f th e re m o v al”);W e r ecogni ze thatthe rul e empl oy ed i n Pegr am and t he 11 otherabove c i t ed ca s es i s onl yanal ogous t o ourpr es enti s s ue. I ndeed, i n eac h of the ci t ed ca s es , the part i es w er e adver s e, and pl ai nt i ffs , at s om e poi nt , act i vel ychal l enged r emoval
. A s r eas oned byJ udge Pos neri n B erns t ei n: I f [Ber ns t ei n] w as convi nced thatthe or i gi nal act i on w a s n o t re m o v a b le[ ,] h e c o u ld h a v e stu c k b yh is guns and w e w oul d have v indi cat ed hi s pos i t i on on a p p e a l. B u t o n c e h e d e c id e d to tak e a d v a n tag e o f h is i nvol unt arypr es ence i n fede r al court t o add a f eder al c laim to h is c o m p lain t[ ,] h e w a s b o u n d to re m a in there
. O therw ise[,] he w o u ld b e in a p o sit ion w h ere i f he w on hi s cas e on the mer i t s i n fede r al court [, ] he c o u ld c laim to h a v e ra ise d th e f e d e ra l q u e stio n in h is amended complaint vol unt ar i l y , and i f he l os the coul d cl ai m t o have r ai s ed i ti nvol unt ar i l yand t o be e n title d to s ta rt o v e r i n s ta te c o u rt
. 738 F. 2d at185. A r guabl y , ther e i s t ens i on betw ee n the rul e of G rubbs and P egr am, and t he gener al doctr i ne of N ew m an- G r een, I nc. v. A l fonzo- L arr ai n, 490 U
. S. 826 ( 1989) , and G rupo D at afl ux v. A t l as G l obal G r oup, 541 U
. S. 567 ( 2004) , that“the j ur i s di ct i on of the C our tdepends upon the s t at e of thi ngs at the t i m e of the act i on br ought , ” i d. at570. W e bel i eve thatG rubbs and Pegr am ar e contr ol l i ng her e. 32 C o tto n v . M a ss . M u t. L if e In s. C o ., 4 0 2 F .3 d 1 2 6 7 , 1 2 8 0 (1 1 th C i r . 2005) ( s ame) ; B arbar a v. N
. Y
. St ock Exch. , I nc. , 99 F. 3d 49, 56 ( 2d C i r . 1996) ( “[I ] f a di s tr i ctcourterr oneous l yexer ci s es r emoval j ur i s di ct i on . . . , and the pl ai nt i ff vol unt ar i l yamends the compl ai ntt o al l ege f

eder al cl ai m s , w e w i l l notr emand forw ant of j ur i s di ct i on. ”) ; K i dd v. Sout hw es tA i r l i nes , C o. , 891 F. 2d 540, 5 4 7 (5 th C ir . 1 9 9 0 ) ( s a m e ); B e rn s te in v . L in d -W a ld o c k & C o ., 738 F. 2d 179, 185 ( 7th C i r . 1984) ( hol di ng thatal though p lain tiff ’s o rig in a l co m p lain t w a s n o t re m o v a b le, h is d e c isio n to “thr ow i n t he t ow el ” and a m end hi s compl ai ntt o s t at e “a n unm i s t akabl e fe der al caus e of a ct i on” conf err ed or i gi nal juri sd ict ion o n the f

ed era l cou rt ”). 11W e not e thatthe mer e ac tof cons ol i dat i ng the fi ve r el at ed 12 cas es ( D avi s , Sabo, U l r i ch, M athi s , and Pi car d) into the K es s l er act i on on J ul y17, 2003, coul d not , byi t s el f, cure the or i gi nal ju risd ictio n a l d e f

e c t in K e ss le r . A s s tate d b yth e S u p re m e C o u rt, “cons ol i dat i on i s perm i t t ed as a mat t erof conveni ence and economyi n admi ni s tr ati o n , butdoes notm er ge the s ui t s i nt o a s i ngl e caus e, or change the r i ght s of the part i es , orm ake thos e w ho ar e part i es i n o n e sui tpart i es i n another
. ” J ohns on v. M anhatt an R y . C o. , 289 U
. S. 479, 496- 97 ( 1933) ( i nt erpr et i ng the pr edec es s or rul e t o R ul e 42( a) ; s ee a l s o N ew found M anage m entC orp. v. L ew i s , 131 F. 3d 108, 116 ( 3d C i r . 1997) (st at i ng that“J ohns on rem ains the ‘a u tho ri tat ive’ statem en t on the law o f c o n so li d ati o n ”). Th u s , we h e l d i n Ce l l a v . T og u m Con s tru c t e u rEn s e ml e i e rEn I ndus tr i e A l i m ent ai r e, 173 F.3d 909, 912 ( 3d C i r . 1999) , that “w h il e a c ons ol i dat i on or derm ayr es ul ti n a s i ngl e uni tof l i t i gat i on, su ch an or derdoes notcr eat e a s i ngl e ca s e for j uri sdi ct i on pu rposes. ” S ee al so B radgat e A ssoc. , Inc. v. F el l ow s, R ead & A s s oc. , I nc. , 999 F. 2d 745, 750 ( 3d C i r . 1993)
. I n other w o rd s, e a c h c o n so lid a ted c a se m u st s u p p o rt a n in d e p e n d e n t b a sis fors ubj ectm att erj ur i s di ct i on. 33 T he amended compl ai nts ubm i t t ed bythe s ett l i ng part i es on N ovember10, 2004, notonl yadded CB N V and G N B T as defe nd ants , bu tal so exp l i ci t l yassert ed fe deral cl ai m s, s p e c i f i c a l l y , v i o l a t i o n s o f

RES P A a tCo u n t s I a n d I I , a n d RI CO at C o u n t I II. W e a re p ersu ad ed that u n d er the S u p rem e C o u rt ’s h o ld in g s in G ru b b s a n d P e g ra m , the D istric t C o u rt p ro p e rly acqui r ed s ubj ectm att erj ur i s di ct i on byvi r tue of the amended c o m p lain t. 12 I I . A N A L Y S IS A ppel l ant s chal l enge ne ar l yeveryas pectof the p ro c e e d in g s in th e D istric t C o u rt. W e e x a m in e e a c h c h a llen g e in turn. A
. C l as s C ert i fi cat i on34 A n appel l at e courtr evi ew s the i ni t i al cert i fi cat i on of the cl as s and the dec i s i on w hethert o appr ove the pr opos ed s ett l ementforabus e of di s cr et i on. I n r e Prudent i al I ns . C o. of A m . S ales P rac ti ce s L it ig., 1 4 8 F
. 3 d 2 8 3 , 2 9 9 (3d C ir
. 1 9 9 8 ); In r e G en. M ot or s C orp. Pi ck- U p T ruck Fuel T ank Pr ods
. L i ab. L i t i g. , 55 F
. 3d 76 8, 78 2 (3d C i r. 19 95 ) ( “G
. M
. T rucks”); G i rs h v . Jep so n , 5 2 1 F
. 2 d 1 5 3 , 1 5 6 (3d C ir
. 1 9 7 5 ). W e m u st d e c id e w h e th e r a d istric t co u rt’s f a ilu re to f o llo w th e p ro c e d u re s re q u ire d b e f o re a p p ro v in g a se ttl e m e n tonl ycl as s act i on w as an abus e of di s cr et i on. A s w e sta ted a b o v e , o n Ju ly1 7 , 2 0 0 3 , the D istric t C o u rt, a c tin g o n th e se ttl in g p a rties ’ m o tio n , co n so lid a ted f iv e se p a ra te cl as s act i ons i nt o t he K es s l eract i on, condi t i onal l ycert i fi ed the cl as s for“s ett l ementpurpos es ” onl y , and pr el i m i nar i l yappr oved the s ett l i ng part i es ’ pr opos ed s ett l ement
. J A at132. T he O r der expl i ci t l yl eftthe i s s ue of w hether“the C l as s m eet s the req u ir em en ts fo r fina l certi fica ti o n u n d er F ed
. R
. C iv. P. 23 (a), ( b) ( 3) , ( c) ( 2) and the U ni t ed St at es C ons t i tut i on” unt i l the fi nal f a ir n e s s h e a ri n g . J A a t 1 3 3
. T he s ett l ementcl as s act i on devi ce of fer s defe ndant s the oppor tuni tyt o engage i n s ett l ementnegot i at i ons w i thout con ceding an yof the argum ents theym ayhav e againstcl ass c e rtific a tio n . S e e G .M . T ru c k s, 5 5 F .3 d a t 7 8 6 . O f ten , as in th is cas e, the part i es neveri nt end t o l i t i gat e the cl ai m s ; r ather , fr om th e tim e th e p lain tiff

s f ile th e c o m p lain t, th e g o a l o n b o th sid e s is t o r eac h a nat i onw i de s ett l ement
. See, e. g. , A m chem Prods
. I nc. v . W ind so r, 5 2 1 U
. S
. 5 9 1 , 6 0 1 -02 (19 9 7 ) (discu ssing ca se w h ere compl ai nt , ans w er , pr opos ed s ett l ementagr eement , and j oi nt m o tio n f o r c o n d iti o n a l ce rtific a tio n o f se ttl e m e n t cla ss w e re a ll fi l ed on s ame day )
. “B ys peci fy i ng cert i fi cat i on fors ett l ement p u rp o se s o n ly
. . . the c o u rt p re se rv e s th e d e f e n d a n t’s a b ili tyto c o n te s t c e rt if

ic a tio n s h o u ld th e s e ttle m e n t f a ll a p a rt .” G .M
. T ru c k s , 5 5 F .3 d a t 7 8 6
. A s s t at ed i n A m chem, “al l Feder al C i r cui t s r ecogni ze the u til ityo f R u le 2 3 (b )(3 ) se ttl e m e n t cla ss e s” a s a m e a n s to f a c ilita te th e s e ttle m e n t o f c o m p le x n a tio n w id e c la s s a c tio n s .35 521 U
. S. at618 ( s t at i ng al s o that“[a ] m ong curr entappl i cat i ons of R ul e 23( b) ( 3) , the ‘ s ett l ementonl y ’ cl as s has become a s t ock d ev ice” ). H o w ev er, draw ing , inter ali a, on Ju d g e B ec k er’s compre hens i ve opi ni ons i n G
. M
. T rucks and G eor gi ne v. Amc h e m P r o d s . , I n c . , 8 3 F
. 3 d 6 1 0 ( 3 d Ci r . 1 9 9 6 ) , th e S u p r e me C our tnot ed the s peci al pr obl ems enc ount er ed w i th s ett l ement cl as s es . See A m chem, 521 U
. S. at621- 23; s ee a l s o, G .M .T ru c k s, 5 5 F .3 d a t 7 9 5 (sta tin g th a t “c o llu sio n , ina d e q u a te pr os ecut i on, and att orneyi nexper i ence ar e the par amount conce r ns i n pr ece r t i fi cat i on s ett l ement s ”)
. N onethel es s , the A m chem C our thel d t hatcert i fi cat i on of cl as s es fors ett l ement purpos es onl yw as cons i s t entw i th Fed. R
. C i v. P. 23, pr ovi ded th a tth e d i s tr i c tc o u r te n g a g e s i n a R u l e 2 3 ( a ) a n d ( b ) i n q u i ry: C on front ed w i th a requ estfor sett l em ent- on l ycl ass ce rt ifi ca ti o n , a d istri ct co u rtn ee d n o t i n q u ir e w h e th e r th e c a se , if trie d , w o u ld p re se n t in tra c tab le m anage m entpr obl ems, s ee Fed. R ul e C i v. Pr oc. 23( b) ( 3) ( D ) , forthe -

- pr opos al i s thatther e be no tri al
. B ut other speci fi cat i on s of t he R ule tho se des i gned t o pr ot ectabs ent ees bybl ocki ng u n w arran ted o r ov erb roa d class d ef init ion s -- d e m a n d u n d ilu ted , ev e n h e ig h ten e d , atte n tio n in the s ett l ementcont ext
. Such att ent i on i s of vi t al i m p o r t a n c e , f

o ra c o u r ta s k e d t o c e r t i f y a s ett l ementcl as s w i l l l ack the opportuni ty , pr es ent w hen a case i s l i t i gated, t o ad j ustthe clas s, i nform ed bythe pr ocee di ngs as theyunfol d. 5 2 1 U .S . a t 6 2 0
. T he C our tm ade c l earthatthe ul t i m at e i nqui ryi nt o the fai r nes s of the s ett l ementunderFed. R
. C i v. P. 23( e) does not r el i eve the courtof i t s r es pons i bi l i tyt o eval uat e R ul e 23( a) and (b ) c o n sid e ra tio n s. “ F e d e ra l co u rts . . . lac k a u th o rityto s ubs t i tut e forR ul e 23' s cert i fi cat i on cr i t er i a a s t andar d never a d o p ted --th a t if a se ttl e m e n t is ‘f a ir,’ the n c e rtific a tio n is pr oper . ” 521 U
. S. at622. I ndeed,

[t ] he s afe guar ds pr ovi ded bythe R ul e 23( a)36 an d (b) c lass-qu ali fy ing crit eria, w e e m p h asize , are noti m pr act i cal i m pedi m ent s - - chec ks s horn of ut i l i ty- - i n t he s ett l ement - cl as s cont ext
. Fi r s t , the st and ards s etfor the p rot ect i on of ab sentcl ass m ember s s erve t o i nhi bi tappr ai s al s of the chanc el l or ’ s footki nd -

- cl as s cert i fi cat i ons depende ntupon the court ’ s ges t al tj udgm entor o v era rch ing im p ression o f th e se tt lem en t’ s fai rness . S e c o n d , if a f

a irn e ss in q u iryu n d e r R u le 23( e) contr ol l ed ce r t i fi cat i on, ecl i ps i ng R ul e 23( a) a n d (b ), an d p e rm itt in g c las s d e sig n a tio n d e sp ite the i m pos s i bi l i tyof l i t i gat i on, both cl as s couns el and courtw oul d be di s arm ed. C l as s couns el con fi ned t o set t l em ent nego t i at i on s could no tuse th e th re a t o f

litig a tio n to p re s s f

o r a b e tte r o f

f e r. . .

. Id. at62 1. T hu s, regar dles s of w hethera dis tri ctcou rtcert i fi es a cl ass for tri al or for sett l em ent, i tm ustfi rs tfi nd that the clas s s at i s fi es al l the r equi r ement s of R ul e 23. I d. ; G
. M
. T rucks , 55 F. 3d at799- 800 ( “I n s um , ‘ a cl as s i s a cl as s i s a cl as s , ’ and a s ett l ementcl as s , i f i ti s t o qual i fyunderR ul e 23, m us tm eetal l of its re q u ir e m e n ts .” ). I n m aki ng thi s anal y s i s , the di s tr i ctcourtm ayt ake the t erm s of the pr opos ed s ett l ementi nt o cons i der at i on. T he ce ntr al inq u iry , h o w ev er, i s the ad eq u ac yo f re p rese n tat ion
. In re Prudent i al , 148 F. 3d at308. T hus , “[s ] ubdi vi s i ons ( a) and ( b) [of R ule 23] focus co urtat t enti on on w hethera propo sed cl ass has s uffi ci entuni tys o thatabs entm ember s can f ai r l ybe bound b yd ec isi o n s o f c lass rep rese n tat ives
. T h at do m inan t con ce rn per s i s t s w hen s ett l ement , r atherthan tr i al , i s pr opos ed. ” A m chem, 521 U
. S. at621. 1
. C erti fica ti o n P roc ess F o ll o w ed b ythe D istri ct C o u rt O urr evi ew of the r ecor d m akes pl ai n thatthe D i s tr i ct C our tdi d notengage i n the R ul e 23( a) and ( b) i nqui ryr equi r ed b yA m c h e m . T h e Ju ly1 7 , 2 0 0 3 O rd e r, w h ich c o n d iti o n a lly37 c e rtifie d th e c las s f

o r se ttl e m e n t p u rp o se s, e x p licitlylef t th e R u le 23 anal y s i s forthe N ovember14, 2003 fai rnes s hear i ng. R evi ew o f th e tran script of

the f airne ss h ea ri n g rev ea ls no instan ce w h ere th e D i s tr i c tC o u r td i s c u s s e d th e i s s u e o f c e r t i f i c a t i o n . F i n a l l y, the D i s tr i ctC our t ’ s D ece m ber4, 2003 Fi nal O r derA ppr ovi ng C lass A cti o n S ett lem en t st ates o n lythat “[ t] h e C lass this co u rt pr el i m i nar i l ycert i fi ed i s fi nal l ycert i fi ed fors ett l ementpurpos es u n d er F ed
. R
. C iv. P. 23 (a), (b)(3 ), an d (c)(2) b ec au se th e c o u rt f in d s th a t th e C las s f

u llysa tisf

ies a ll th e a p p lica b le r e q u ire m e n ts o f F ed
. R
. C iv. P. 23 an d d u e p roc ess.” JA 1 5 9
. T h e C o u rt ’s ip se d ix it state m e n t w a s n o t ac c o m p a n ied b ya n yd isc e rn a b le analy si s. A ppel l ees di r ectus t o the Pr opos ed Fi ndi ngs of Factand C oncl us i ons of Law s ubm i t t ed bythe s ett l i ng part i es , w hi ch do p rov ide a d etail ed R u le 23 an aly sis. A lth o u g h the D istri ct C o u rt di d nots i gn them, i tadopt ed them w hol es al e byw ayof a footnot e i n i t s D ece m ber4, 2003 M emora ndum acc om pany i ng the F inal O rde r ap p rov ing sett lem en t. In th is fo o tno te, the C o u rt sta ted th a t Subse quentt o t he hea r i ng, cl as s couns el s ubm i t t ed pr opos ed fi ndi ngs of fa ctand conc l us i ons [of l aw ]
. . . . U pon i ndepende ntr evi ew of the r ecor d i n thi s cas e, the courtfi nds thatthe pr opos ed fi ndi ngs and conc l us i ons ar e ful l ys uppor t ed b yth e re c o rd a d o p ted b yth e c o u rt a n d in c o rp o ra ted in to th is m e m o ra n d u m b yre f

e re n c e a s if

f u lly se t f o rt h
. J A at176. W e a re b o u n d b yth e S u p re m e C o u rt’s d e c isio n in A nder s on v. B es s emerC i ty , 470 U
. S. 564, 572 ( 1985) , hol di ng thata di s tr i ctcourt ’ s verbat i m adopt i on of a pa r ty ’ s pr opos ed f in d in g s o f

f a c t an d c o n c lu sio n s o f

law , alth o u g h h ig h ly di s appr oved of, i s notpers e gr ounds forr ever s al
. L ans for dC oal dal e J oi ntW at erA uth. v. T onol l i C orp. , 4 F. 3d 1209, 1215- 16 ( 3d C i r . 1993)
. H ow ever , ther e mustbe evi dence i n the r ecor d demonstr at i ng thatthe di s tr i ctcourtexer ci s ed
“ in d e p e n d e n t ju d g m e n t” in a d o p tin g a p a rt y ’s p ro p o s e d f in d in g s . B ri g h t v. W estm o relan d C o u n ty , 3 8 0 F
. 3 d 7 2 9 , 7 3 1 -32 (3d C ir
.38 2004) ; s ee a l s o Pa. E nvt l
. D ef. Found. v. C anon- M cM i l l an Sch. D ist., 1 5 2 F .3 d 2 2 8 , 2 3 3 (3 d C ir. 1 9 9 8 ) (“ T h e c e n tra l issu e is w h ethe r th e d istri ct co u rth as m ad e a n ind ep en d en t j u d g m en t. ”). I n t he pr es entcas e, the onl yevi dence w e fi nd i n the re c o rd th a t th e D istric t C o u rt e x e rc ise d in d e p e n d e n t ju d g m e n t is the fa ctthati ts ai d i tdi d. J A at176 ( “U pon i ndepende ntr evi ew of the r ecor d i n t hi s cas e. . . . ”)
. I ndeed, w hen ques t i oned ator al ar gum ent , A ppel l ees w er e unabl e t o poi ntt o anyaddi t i onal re c o rd e v id e n c e to s u p p o rt a f in d in g o f in d e p e n d e n t ju d g m e n t. B yc o n tra st, th e re is s u b sta n tial b a sis in th e re c o rd to q u e s t i o n wh e th e r“ i n d e p e n d e n tj u d g me n t ” wa s e x e r c i s e d
. As det ai l ed above , s ee J A at1973- 74, dur i ng a cl os ed doors es s i on hel d befor e the N ovember14, 2003 fai rnes s hear i ng, the D i s tr i ct C our tas ked the s ett l i ng part i es t o s ubm i tthe pr opos ed fi ndi ngs o f f a c t a n d c o n c lu s io n s o f

la w , w h ic h it “ w o u ld a d o p t b a s ic a lly.” C f. A n d erso n , 4 7 0 U
. S
. at 57 2 -73 (ho lding that d istri ct co u rt ’s fi ndi ngs s houl d r ece i ve no l es s defe r ent i al r evi ew w hen di s tr i ct courtannounce d i t s deci s i on t o part i es fi r s tand then as ked p re v a ili n g p a rtyto p re p a re f in d in g s o f

f a c t, m a n yo f

w h ich it ul t i m at el yadopt ed verbat i m )
. A tthe ac tual fai rnes s hear i ng, cl as s cert i fi cat i on i t s el f w as neverdi s cus s ed. W e al s o not e thatnear l yeveryor deri s s ued bythe D i s tr i ct C our ti n t hi s cas e w as a verbat i m copyof a pr opos ed or der offe r ed bythe s ett l i ng part i es . See, e. g. , J ul y17, 2003 O r der condi t i onal l ycert i fy i ng cl as s fors ett l ementpurpos es ; O ct ober 14, 2003 O r deri nval i dat i ng cl as s opt - out s and r es tr i ct i ng comm uni cat i ons betw een A ppel l ant s and cl as s ; N ovember10, 2 0 0 3 O r d e rq u a s h i n g A p p e l l a n t s r e q u e s tf o rd i s c o v e ry; D ece m ber4, 2003 Pr opos ed Fi ndi ngs of Factand C oncl us i ons of Law
. W e ar e ther efor e conc erned thatthe D i s tr i ctC our tm ay have a bdi cat ed i t s r ol e as a neutr al and i ndepende ntadj udi cat or or , atthe veryl eas t , s acr i fi ced i ndepende ntj udgm entfor a d m in is tr a tiv e e f

f ic ie n c y . W e a re c o n f

id e n t th a t th e d istric t ju d g e sin c e re ly concl uded thathe had e xer ci s ed the r equi r ed “i ndepende nt jud g m en t. ” S tat em en ts of su b jecti v e c o n clus ion s, h o w ev er, areJ udge A l di s ertnot es thatw e fi nd i ns truct i on i n the w or ds 13 of J us t i ce Fel i x Fr ankfurt er : “[F] r agi l e as r eas on i s and l i m i t ed as l aw i s as the expr es s i on of the i ns t i tut i onal i zed medi um of r eas on, th a t’s a ll w e h a v e sta n d in g b e tw e e n u s a n d th e tyra n n yo f m e re w ill and the cru el tyof unbr i dl ed, undi s ci pl i ned fe el i ng. ” R emar ks on h is re tirem e n t af

ter 2 3 y e a rs o n th e S u p re m e C o u r t, a s q u o ted in T im e M a g a z in e , S e p t. 7 , 1 9 6 2 a t 1 5
. 39 i ns uffi ci entw hen adopt i ng verbat i m s ugges t ed fi ndi ngs of fa ct a n d c o n c lu sio n s o f

law to m e e t th e stric t re q u ire m e n ts o f R u le 23
. W hat i s r equ i red ata m i nim um i s a st at em ent of reas on s, expr es s ed i n obj ect i ve form , how the courtexer ci s ed in d e p e n d e n t ju d g m e n t in e v a lu a tin g th e su b m iss io n s o f c o u n se l. I n t he cont extof m eet i ng the r equi r ement s of R ul e 23 ( a) and ( b) , w e ar e nots at i s fi ed thatthe bar e s t at ementthatthe “pr opos ed fi ndi ngs and conc l us i ons ar e ful l ys uppor t ed i n the re c o rd ” m e e ts th e m in im u m sta n d a rd o f a c c e p tin g v e rb a tim a do pt i on a s c on t e mpl a t e d i n the t e a c hi ng s of A nd e r s on , 47 0 U. S. at57 2. W e beli eve thata cou rtm ustsetforth p ers uasi ve reasons, sta ted w ith o b

jec tiv ity , w h yth e su b m iss io n s o f c o u n se l to tally r efl ectthe i ndepende ntj udgm entof the court
. T he ac tof acc ept i ng as i t s ow n t hes e cr i t i cal s ugges t i ons i s an i m por t ant j udi ci al concl us i on w hos e ac cept abi l i tyi s m er i t ed onl yt o the ext entthats ound r eas on s t at ed publ i cl ys uppor t s the acc ept ance . 13 B ec au se w e a re n o t con v ince d that the D istri ct C o u rt exer ci s ed “i ndepende ntj udgm ent ” i n adopt i ng the pr opos ed f in d in g s o f

th e se ttl in g p a rties , w e c o n c lu d e th a t th e se ttl e m e n to n lyc las s w a s n e v e r p ro p e rlyc e rtifie d in a c c o rd a n c e w ith A m chem. “[W ] i thoutcert i fi cat i on ther e i s no cl as s act i on, and i n a s ett l ementent er ed w i thoutcl as s cert i fi cat i on the j udgm ent w i l l no thav e res j ud i cat a effect on the cl ai m s of ab sentcl ass m ember s . ” G
. M
. T rucks , 55 F. 3d at800 ( i nt ernal ci t at i on, q u o tatio n s, a n d a ltera tio n s o m itt e d ). W e w ill th e re f o re v a c a te th e s e ttle m e n t O rd e r a n d re m a n d to th e D is tr ic t C o u rt
. 2. T he A ppr opr i at enes s of C l as s C ert i fi cat i onR ul e 23( b) ( 1) author i zes cert i fi cat i on i n cas es w h ere 14 separat e act i on s by or against i nd i vidual cl ass m em bers w ou l d ri sk e sta b lish in g “ in c o m p a tib le s tan d a rd s o f c o n d u c t f

o r th e p a rty oppos i ng the cl as s , ” R ule 2 3 (b) ( 1) ( A ) , orw oul d “as a pr act i cal m att erbe di s pos i t i ve of the i nt er es t ” of nonpar tycl as s m ember s “or su b sta n tiallyim p a ir o r im p e d e th e ir a b ili tyto p ro tec t th e ir i nt er es t s . ” R ul e 23( b) ( 1) ( B)
. R ul e 23( b) ( 2) author i zes cl as s act i ons s eeki ng decl ar at oryori nj unct i ve rel ief, and i s us ed, forexampl e, i n ci vi l r i ght s cas es al l egi ng cl as s - bas ed di s cr i m i nat i on. R ule 23(b)( 3) provi des: 15 ( b) A n act i on m ay be m ai nt ai ned as a cl as s act i on if t he p re re q u isites o f

su b d iv isio n (a ) a re s a tisf ied , an d in addi t i on:

. . . ( 3) the courtfi nds thatthe ques t i ons of l aw orfac t comm on t o t he mem ber s of the cl as s pr edomi nat e over anyques t i ons aff

ect i ng onl yi ndi vi dual m ember s , and that a cl as s act i on i s s uper i ort o otheravai l abl e met hods for the fa i rand ef

fi ci entadj udi cat i on of the contr over s y . T he

40 O u r c o n c lu sio n th a t th e se ttl e m e n t cla ss w a s n o t p ro p e rly cert i fi ed does notm ean thatthe cl as s coul d notbe ce r t i fi ed on r emand. B eca us e w e bel i eve c ert i fi cat i on m ayi ndeed be appr opr i at e, w e exa m i ne s om e of the r el evantfac t or s t o be cons i der ed on r emand. W e have s t at ed that“R ul e 23 i s des i gned t o as s ur e that court s w i l l i dent i fythe comm on i nt er es t s of cl as s m ember s and eval uat e the named pl ai nt i ffs ’ and couns el ’ s abi l i tyt o fai r l yand a d e q u a te ly p ro te c t c la s s in te re s ts .” G .M . T ru c k s , 5 5 F .3 d a t 7 9 9
. T o be ce r t i fi ed, a cl as s m us ts at i s fythe fourr equi r ement s of R ul e 23( a) : ( 1) num er os i ty ; ( 2) comm onal i ty ; ( 3) typi cal i ty ; and ( 4) adequa cyof r epr es ent at i on. Fed. R
. C i v. P. 23( a)
. I f the R ul e 23( a) r equi r ement s ar e met , the courtm us tthen fi nd that the cl as s fi t s w i thi n one of the thr ee c at egor i es of cl as s act i ons s etfor th i n Fed. R
. C i v. P. 23( b)
. I n the pr es entcas e, the 14 part i es chos e t o pur s ue a c l as s act i on underR ul e 23( b) ( 3) , the cu stom aryv eh icl e f

o r da m ag e a cti o n s. T h u s, the D istri ct C o u rt 15m at t ers pert i nen tt o the fi nd i ng s i nclude: (A ) the int eres t of m ember s of the cl as s i n i ndi vi dual l ycontr ol l i ng the pr os ecut i on ordefe ns e of s epar at e ac t i ons ; ( B ) the ext ent and natur e of a nyl i t i gati on con cerni ng the co ntr ov ers y al readycom m enced byor agai nstm em bers of t he clas s; ( C ) the des i r abi l i tyorundes i r abi l i tyof conc entr at i ng the l i t i g a t i o n o f

th e c l a i ms i n th e p a r t i c u l a rf o ru m; [ a n d ] ( D) the di ffi cul t i es l i kel yt o be enc ount er ed i n the m a n a g e m e n t o f

a c la s s a c tio n . R ule 23(e) provides: 16 T h e c o u rt m u st a p p ro v e a n yse ttl e m e n t, vo lu n tar yd ism iss a l, orcompromi s e of the cl ai m s , i s s ues , o r defens es of a c e rtifie d c las s . . . [ a n d ] m u st dire c t n o tice in a r e a s o n a b le m a n n e rt o a l l c l a s s m e m b e r s w h o w o u l d b e b o u n d b y a pr opos ed s ett l ement , vol unt arydi s m i s s al , orcompromi s e. F ed
. R
. C iv. P. 23 (e)(1)(A ), (B ). 41 m us tdet erm i ne thatcomm on ques t i ons of l aw orfac t pr edomi nat e and thatthe cl as s act i on m echa ni s m i s the s uper i or m ethod foradj udi cat i ng the ca s e. “The r equi r ement s of s ubs ect i ons ( a) and ( b) ar e des i gned t o i ns ur e thata pr opos ed c las s h a s ‘s u f

f icie n t u n ityso th a t ab se n t cla ss m e m b e rs c a n f a irly b e b o u n d b yd ec isi o n s o f c lass rep rese n tat ives
. ’” In re P rud en ti al, 1 4 8 F
. 3 d at 30 9 (qu o ti n g A m ch em , 5 2 1 U
. S
. at 62 1 ); s ee a l s o H as s i ne v. J eff es , 846 F. 2d 169, 176 n. 4 ( 3d C i r . 1988) ( “‘ [C ] om m onal i ty , l i ke ‘ num er os i ty ’ eval uat es the s uffi ci encyof the cl as s i t s el f, and ‘ typi cal i ty ’ l i ke ‘ adequa cyof r epr es ent at i on’ eval uat es the s uffi ci encyof the named pl ai nt i ff.
. . . ”) ( ci t at i on om i t t ed)
. A courtm us tdet erm i ne cl as s cert i fi cat i on i ndepende nt l yfr om i t s R ul e 23( e) i nqui ryi nt o the fa i rnes s of the pr opos ed s ett l ement
. A m chem, 521 U
. S. at621. 16 i. T h e R u le 2 3 (a ) C riter ia T here i s no d i spute that the co nd i t i on al l ycert i fi ed clas s m e e ts th e n u m e ro s ity a n d c o m m o n a lity p ro n g s o f R u le 2 3 (a ). S ee gen eral l yIn r e P rudenti al , 14 8 F
. 3d at30 9. T he clas s cons i s t s of appr oxi m at el y44, 000 m ember s and “the named42 pl ai nt i ffs s har e atl eas tone ques t i on of fa ctorl aw w i th the gr i evanc es of the pr os pect i ve cl as s . ” B abyN eal byK ant erv. C a s e y , 4 3 F .3 d 4 8 , 5 6 (3 d C ir . 1 9 9 4 ). W e li k ew ise find that the re q u ir em en ts of typ icali tyare m e t. “T h e c o n c e p ts o f

c o m m o n a litya n d typ ica litya re b ro a d ly d e f in e d a n d ten d to m e rg e .” B a b yN e a l, 43 F .3 d a t 5 6 . B o th conce pt s s eek t o ens ur e thatthe i nt er es t s of the abs ent ees w i l l be adequa t el yr epr es ent ed bythe named pl ai nt i ffs
. G en. T el
. C o. of the S
. W
. v . F alco n , 4 5 7 U
. S
. 1 4 7 , 1 5 7 n . 1 3 (19 8 2 ). H o w ev er, “neither of these r equ i rem ents m and at es that al l pu t at i ve clas s m ember s s har e i dent i cal cl ai m s . ” B abyN eal , 43 F. 3d at56; s ee al s o H as s i ne, 846 F. 2d at176- 77; W ei s s v. Y or k H os p. , 745 F. 2d 7 8 6 , 8 0 9 ( 3 d Ci r . 1 9 8 4 )
. “ [ C] a s e s c h a l l e n g i n g th e s a me unl aw ful conductw hi ch af fec t s both the named pl ai nt i ffs and the put at i ve cl as s us ual l ys at i s fythe typi cal i tyr equi r ement i r r es pect i ve of the vary i ng fac tpatt erns under l y i ng the i ndi vi dual c la im s .” B a b yN e a l, 4 3 F .3 d a t 5 8
. T he mer e fa ctthats om e mem ber s of the cl as s m ayhave addi t i onal s t at e orfede r al l aw cl ai m s , notas s ert ed bythe named pl ai nt i ffs , does notpr ecl ude a f i ndi ng of typi cal i ty . B eca us e the cl ai m s of al l cl as s m ember s her e depe nd upon the exi s t ence of the Shum w ays cheme, “thei ri nt er es t s ar e s uffi ci ent l yal i gned [ su c h ] th a t th e c las s re p re se n tativ e s c a n b e e x p e c ted to adequa t el ypur s ue the i nt er es t s of the abs ent ee c l as s m ember s . ” I n r e Prudent i al , 148 F. 3d at312 ( ci t i ng A m chem, 521 U
. S. at 621) ; s ee a l s o B abyN eal , 43 F. 3d at58 ( “W her e an a ct i on chal l enges a pol i cyorpr act i ce, the named pl ai nt i ffs s uffe r i ng on e speci fi c i njuryfrom the p ract i ce can repr esenta cl ass su f f e rin g o th e r in

ju rie s, so lo n g a s a ll th e in ju rie s a re sh o w n to re s u lt f ro m th e p ra c tic e .” ). H avi ng det erm i ned thatthe numer os i ty , typi cal l y , and comm onal i typr ongs ar e met , w e turn t o the i s s ue of the adequa cyof cl as s r epr es ent at i on. See gene r al l yA m chem, 521 U
. S. at625. T hi s r equi r ementencompas s es tw o di s t i nct i nq uir i es desi gn ed to prot ectthe int eres t s of ab sent ee cl ass m e m b e rs: “ it co n sid e rs w h e th e r th e n a m e d p lain tiff s’ in ter e sts ar e s uffi ci ent l yal i gned w i th the abs ent ees ’ , and i tt es t s theA ppel l ant s al s o al l ege th atm ember s of the cl as s have 17 cl ai m s undervar i ous s t at e l aw cons um erpr ot ect i on s t atut es . For p u rp o se s o f o u r R u le 2 3 (a ) a n a ly sis , it is n o t n e c e ss a ryto d e lv e in to th e v ia b ility o f

s u c h c la im s . 15 U
. S. C. § 16 06 ( c ) pr ov i de s a s a fe ha rbo r fo rA PR 18 o v e r s t a t e m e n t s o f

. 1 2 5 %. C ons um er s al s o have the unqual i fi ed r i ghtt o r es ci nd a 19 c re d it tra n sa c tio n (in w h ic h a s e c u rityin ter e st is re tain e d in th e ir pr i nci pal dw el l i ng) w i thi n thr ee bus i nes s d ay s fol l ow i ng the cons um m at i on of the tr ans act i on or the del i veryof the i nform at i on a b o u tth e r i g h tt o r e s c i n d a n d r e s c i s s i o n f o r ms r equ i r e d b yTI LA 43 q u a lif ic a tio n s o f

th e c o u n s e l to re p re s e n t th e c la s s .” G . M
. T ru c k s , 5 5 F .3 d a t 8 0 0
. I n cons i der i ng the fi r s ti nqui ry , w e mustexami ne A pp el l ants ’ al l egati on s that m anym em bers of t he clas s, inclu d ing so m e n am ed p lai n ti ff s, h av e c o lorab le claim s u n d er, i nteral i a, T ILA and H O E P A that w ere notassert ed b ycl ass 17 couns el ei theri n t he compl ai ntordur i ng negot i at i ons of se ttl e m e n t. T IL A is a f

e d e ra l co n su m e r p ro tec tio n sta tu te, in ten d e d to p rom o te th e inf

o rm ed u se o f c red itb yreq u ir ing ce rt ain u n ifo rm di s cl os ur es fr om cr edi t or s . T he s t atut e i s i m pl ement ed by R egul at i on Z , 12 C
. F. R
. §§ 226. 1 ets eq. , w hi ch w as pr om ul gat ed bythe B oar d of G overnor s of the Feder al R es erve Sy s t em underthe mandat e of 15 U
. S. C
. § 1607. A m ong other thing s, cre d it o rs w h o m ak e loa n s sec u red b ya b o rrow er’s p rin c ip a l d w e lli n g a re re q u ire d to p ro v id e a ll b o rro w e rs w ith “mat er i al di s cl os ur es , ” i ncl udi ng “the annua l per cent age r at e, the fi nance char ge, the amountfi nance d, the t ot al paym ent s , [and] the paym ents chedul e. ” 12 C
. F. R
. § 226. 23. I f “mat er i al di s cl os ur es ” ar e notpr ovi ded ori nacc ur at el ypr ovi ded, the 18 cr edi t ori s s tr i ct l yl i abl e and a borr ow erhas the r i ghtt o r es ci nd th e lo a n u p to “ 3 y e a rs a f ter c o n su m m a tio n , u p o n tra n sf e r o f a ll of the cons um er ’ s i nt er es ti n the pr operty , [or ] upon s al e of the pr operty , w hi cheve roccur s fi r s t
. ” I d. I n addi t i on t o the r i ght 19t ogetherw i th a s t at ementcont ai ni ng the mat er i al di s cl os ur es req u ir ed b yT IL A , w h iche v er is l ater. T h e T IL A p ro v isio n g o v e rn in g a c tu a l d a m a g e s re a d s, in 20 p a rt: E xceptas otherw i s e pro v ided i n thi s s ect i on, any cr edi t or w ho fai l s t o compl yw i th anyr equi r ement i m pos ed under thi s part
. . . w i th r espe ct t o any p e rso n is l iab le to su c h p e rso n in a n a m o u n t eq u a l to

. . . (1) anyactual dam age sust ai ned by such p ers on as a re s u lt o f th e f a ilu re ; . . . . 15 U
. S. C
. § 1640( a) ( 1)
. Sever al court s have he l d thatdetr i m ent al r e l i a n c e i s a n e l e me n t o f e s t a b l i s h i n g a c tu a l d a ma g e s u n d e rT I L A. S e e , e.g ., T u rn e r v . B e n e f icia l C o rp ., 2 4 2 F .3 d 1 0 2 3 , 1 0 2 8 (1 1 th C ir . 2 0 0 1 ) ( e n b a n c ); P e rr o n e v . G e n . M o to rs A c c e p ta n c e C o rp ., 232 F. 3d 433, 436- 40 ( 5th C i r . 2000)
. W e have n o t h ad t he oppor tuni tyt o exami ne thi s i s s ue. T I L A al s o pr ovi des foratt orney ’ s fe es and c os t s . 15 21 U
. S
. C
. § 1 6 4 0 (a)(3).

S p e c if ica lly , H O E P A p ro tec tio n s a p p lyif a lo a n m e e ts 22 o n e o f tw o h ig h -c o st lo a n trig g e rs: (1 ) th e a n n u a l p e rc e n tag e ra te ( “A PR ”) exce eds byei ghtper cent the y i el d on T r eas urys ecur i t i es of compar abl e matur i tyforfi r s t - l i en l oans , or above t en per centfor s ubor di nat e- l i en l oans ; or( 2) the t ot al of al l the l oan’ s poi nt s and 44 of r es ci s s i on, an aggr i eved borr ow erm ay , w i thi n one y earof the date of t he v i olat i on , seek “actual dam age[ s] sust ai ned
. . . as a r es ul tof the fa i l ur e, ” and s t atut orydamages , w hi ch ca nnot 20 e x c e e d $ 5 0 0 ,0 0 0 o r o n e p e rc e n t o f th e c re d ito r’s n e t w o rth ( w hi cheve ri s l es s ) i n t he ca s e of a cl as s act i on. 15 U
. S. C
. §§ 1 6 4 0 (a)(1), ( 2 )(B ). 21 H O E P A , enacted as an am end m ent t o T ILA , creat es a speci al cl ass of regul at ed loans that ar e m ade at hi gh er i nter est ra tes o r w ith e x c e ss iv e c o sts a n d f e e s. T h e se lo a n s a re n o t o n ly 22fee s exce ed eigh t pe r centof the l oan t ot al or$400 ( adj us t ed for i nfl at i on) , w hi cheve ri s gr eat er . 15 U
. S. C
. §§ 1602( aa) ( 1) , ( 3) ; 12 C .F .R . § § 2 2 6 .3 2 (a )( 1 )( i) , (i i)
. 45 su b ject t o the re str ict ion o n term s co m m o n lyu sed b yp red atory len d e rs to m a n ip u late th e c o st o f th e lo a n s, b u t ar e a lso su b jec t to sp e c ial d isc lo su re re q u ire m e n ts. S e e 1 5 U .S .C . § 1 6 3 9 . W ith in th re e b u s in e s s d a y s p ri o r t o th e c o n s u m m a tio n o f a lo a n , a cr edi t ori s r equi r ed t o di s cl os e t o the borr ow er , i nt eral i a, the A P R o f th e lo a n a n d th e a m o u n t o f re g u la r m o n th ly p a ym e n ts
. 1 5 U .S .C . § § 1 6 3 9 (a )(2 ), (b )(1 ). F a ilu re to m a ter iallyc o m p ly w i th s uch r equi r ement s ent i t l es a borr ow ert o “an a m ountequal to the su m o f a ll fin an ce ch arg es a n d fe es p aid b ythe c o n su m er.

. . .” Id . at § 1 6 4 0 (a )(4 ). V o lu n tar ya ss ig n e e s o f a c re d it obl i gat i on ar e l i abl e forT I L A orH O E PA vi ol at i ons bythe or i gi nal cr edi t orw her e the vi ol at i on i s appar enton the fa ce of th e d is c lo s u re s ta te m e n t. I d . a t § 1 6 4 1 (a ). A n aff i r m at i ve ac t i on underH O E PA m us tbe br ought w i thi n one y earof the vi ol at i on, i d. at§ 1640( e) , and an a ct i on f o r r e s c is s io n m u s t b e b ro u g h t w ith in th re e y e a rs , 1 2 C .F .R . § 2 2 6 .2 3 . H o w e v e r, th e se p ro v isio n s a re su b jec t to e q u itab le t ol l i ng. See R amadan v. C has e M anhatt an C orp. , 156 F. 3d 499, 50 4 ( 3d Ci r . 19 98 ) ; c f. M ul l i na x v . Radi a n Guar
. I nc . , 19 9 F. Supp. 2d 311, 328 ( M
. D
. N
. C
. 2002)
. N o s t atut e of l i m i t at i ons a pp l i e s t o a bo r r owera s s e r t i ng a vi ol a t i on of TI LA orH O EPA a s a d e f e n s e (b yre c o u p m e n t o r s e t- o f f ) i n a f o re c lo s u re a c tio n . Id . a t § 1 6 4 0 (e ). A ppel l ant s cont end thatm anycl as s m ember s have c o lo ra b le H O E P A a n d T IL A c laim s b e c a u se d e f e n d a n ts m at eri al l yun derst at ed the A P R i n m anyof the cl ass m em bers’ T I L A di s cl os ur es . M or e part i cul ar l y , the A ppel l ant s not e that the ca l cul at i on of A PR m us ti ncorpor at e “f i nance char ges , ” as defi ned i n R egul at i on Z , 12 C
. F. R
. § 226. 4. A l though t i t l e fe es a re o rd in a ri ly ex c lu d e d f ro m th e d e f

in itio n o f “ f in a n c e c h a rg e s ,” 12 C
. F. R
. § 226. 4( c) ( 7) , and ther efor e noti ncorpor at ed i nt o the A P R , A pp el l ants con t end that the ti t l e fees i n the presentcase ar e bogus beca us e theyw er e di r ect l ypas s ed t o the Shum w ay46 O rg a n iza tio n . T h e yc o n ten d th a t f a ilu re to in c o rp o ra te th e se tit le fee s i nt o t he A PR cal cul at i on r es ul t ed i n m at er i al l yunder s t at ed A PR di s cl os ur es . A ppel l ant s thus ur ge thatdefe ndant s ’ pot ent i al T I L A and H O E PA l i abi l i tyaver ages $20, 108. 76 perborr ow er f o r th e n a tio n w id e c las s, a n a m o u n t f a r g re a ter th a n th e $ 2 5 0 to $925 thateac h cl as s m emberw oul d r ece i ve pur s uantt o the s e ttle m e n t. A l though cl as s couns el do notchal l enge the s ubs t ance of A ppel l ant s ’ above a r gum ent s , theydo as s ertthatthe dec i s i on not t o pur s ue TILA and H O E PA cl ai m s w as r eas onabl e bec aus e ( 1) mos tmembe r s of

the pu t a t i ve c l a s s ha d e xe c ut e d HO EPA di s cl os ur e form s ; ( 2) m anycl as s m ember s ’ cl ai m s have l aps ed due t o H O E PA ’ s one- y ears t atut e of l i m i t at i ons on aff i r m at i ve cl ai m s; (3) T ILA or H O E P A cl ai m s could no tbe cert i fi ed as a c las s a c tio n b e c a u se p ro se c u tio n w o u ld in v o lv e su b sta n tial in d iv id u a l in q u iries ; an d (4 ) e sta b lish in g a c tu a l d a m a g e s w o u ld be di ffi cul tbeca us e s ever al court s have he l d thatdetr i m ent al re lia n c e is a n e le m e n t in a T IL A c la im f o r a c tu a l d a m a g e s . T he D i s tr i ctC our t , on anal y s i s , m ayfi nd thatthes e ex pos tr at i onal es ar e notcompel l i ng. Fi r s t , the TILA pr ovi s i ons make pl a i n tha tr e ga r dl e s s of w he the ra s i gn e d HO EPA acknow l edgmenti s pr ovi ded, s tr i ctl i abi l i tyi s i m pos ed on len d e rs a n d o n th e ir a ss ig n e e s if th e A P R o f

a lo a n is m a ter ially m i s s t at ed i n t he TILA di s cl os ur e form s . 15 U
. S. C
. §§ 1639( a) ( 2) ( A ) , 1641( d)
. Second, al though i tm aybe true thatthe on e - y e a rs t a tut e of

l i mi t a t i on s on a ff

i r mat i ve TI LA a nd H O EPA cl ai m s has l apsed f

or an ap preci able num ber of clas s m em bers, the r el evants t atut oryper i od forcl ai m s of r es ci s s i on i s thr ee y ear s , and no l i m i t at i ons per i od appl i es fordefe ns i ve cl ai m s for rec o u p m en t or setof

f in a f o rec losu re a cti o n . M o reo v er, A ppel l ees themsel ves s ubm i tthatappr oxi m at el y14, 000 m ember s of the cl as s have l oans thathave c l os ed “w i thi n one y earof the dat e of f

i l i ng of the r el evantcompl ai nt , ” s ee J A 1984. T hus , i tappea r s thatone- thi r d of the cl as s m ayhave a ffi r m at i ve T I L A and H O E PA cl ai m s thatar e nott i m e barr ed. T hi r d, cl as s couns el pr ovi de no per s uas i ve s uppor tforthe pr opos i t i on thatT I L A and H O E PA cl ai m s cannotbe as s ert ed as47 partof a c l as s act i on, oratthe veryl eas ti ncorpor at ed i nt o the n e g o t i a t i o n s o f

a s e t t l e me n t
. I n d e e d , 1 5 U. S
. C. § 1 6 4 0 ( a ) ( 2 ) ( B) e x p lic itly c o n te m p la te s th e p o s s ib ility o f a c la s s a c tio n s u it. I d
. A l though t he ca l cul at i on of i ndi vi dual damages i s nece s s ar i l yan i ndi vi dual i nqui r y , the court s have c ons i s t ent l yhel d thatthe nece s s i tyof thi s i nqui r ydoes notpr ecl ude cl as s act i on tr eatm ent w her e cl as s i s s ues pr edomi nat e. See, e. g. , I n r e V i s a C heck / M as t er M oneyA nt i trus tL i t i g. , 280 F. 3d 124, 139 ( 2d C i r . 2001) ( “C om m on i s s ues m aypr edomi nat e w hen l i abi l i tycan be d e t e r mi n e d o n a c l a s s - wi d e b a s i s , e v e n wh e n th e r e a r e s o me i ndi vi dual i zed da m age i s s ues . ”) ; B ertul l i v. I ndep. A s s ’ n of C ont ’ l Pi l ot s , 242 F. 3d 290, 298 ( 5th C i r . 2001) ( aff i r m i ng di s tr i ctcourt ’ s det erm i nat i on thatcomm on i s s ues pr edomi nat ed b e c a u s e “ [ a ] l th o u g h c a l c u l a t i n g d a ma g e s wi l l r e q u i r e s o me ind ividu ali ze d d eterm ination s, itap p ea rs th at virtu all yev ery iss u e p rio r to d a m a g e s is a c o m m o n iss u e ” ). T h is is e sp e c ially true w her e “the fa ctof i nj uryand damage br eak dow n i n w hat m aybe cha r act er i zed a s vi r tual l ya mechani cal t as k, capa bl e of ma th e ma t i c a l o rf

o r mu l a c a l c u l a t i o n . . . . ” W i n d h a m v . Am. B r ands , I nc. , 565 F. 2d 59, 68 ( 4th C i r . 1977) ( en banc ) ( i nt ernal ci t at i ons and quot at i ons om i t t ed)
. W hetheran i ndi vi dual borr ow erhas a vi abl e TILA orH O E PA cl ai m m aybe det erm i nabl e byconduct i ng s i m pl e ar i thm et i c comput at i ons on c e r t a i n f i g u r e s o b t a i n e d f

r o m t h e f a c e o f e a c h l o a n ’ s TI LA D is c lo s u re S ta te m e n t. Fi nal l y , cl as s couns el ’ s ar gum entthatas s es s i ng actual dam ages w ou l d b e diffi culti n the cl ass act i on con t ext, becau se s ever al court s have he l d thatdetr i m ent al r el i ance i s an el ement of es t abl i s hi ng s uch damages underT I L A , s ee, e. g. , T urnerv. B enef i ci al C orp. , 242 F. 3d 1023, 1028 ( 11th C i r . 2001) ( en banc) ; Perr one v. G en. M ot or s A cce pt ance C orp. , 232 F. 3d 433, 4 3 6 -4 0 (5 th C ir. 2 0 0 0 ), is n o t p e rsu a siv e . A s s tate d a b o v e , itis undi s put ed thatT I L A s ubj ect s cr edi t or s t o s tr i ctl i abi l i tyfor cl ai m s of r es ci s s i on. See, e. g. , Schnal l v. A m boyN at ’ l B ank, 2 7 9 F .3 d 2 0 5 , 2 1 7 (3 d C ir. 2 0 0 2 ) (“ T h is C o u rt h a s s q u a re lyh e ld that r el i ance is no tan elem ent of a cause o f act i on [fo r r easons] underT I L A
. ”) ; I n r e Por t er , 961 F. 2d 1066, 1078 ( 3d C i r . 1992) (“ T IL A a c h iev e s its re m e d ial g o a ls b ya sy ste m o f stric t li a b ili ty . . . .” ).Th e a v e r a g e a g e o f th e n a med pa r t i e s ’ l o a n s a tth e t i me 23 th e re lev a n t co m p lain t w a s f iled w a s f

o rty -n in e a n d o n e -h a lf m onths
. J A at497. 48 E ven i f thi s courtw er e t o adoptthe hol di ngs of Turne r and Perr one i n actual damages cas es ( an i s s ue w e nee d not d e c id e h e re ), itd o e s n o t n e c e ss a rilyf o llo w th a t th is “ h ig h ly i nd i vidual i zed inqu i ry. . . l i kelyw ou l d h ave p recl ud ed .
. . cl ass cert i fi cat i on” underR ul e 23( b) ( 3)
. A ppel l ees ’ B r . at31- 32. T he exi s t ence of an i ndi vi dual i nqui rydoes notpr ecl ude cl as s act i on tr eatm entw her e al l cl as s m ember s fac e the nec es s i tyof pr ovi ng the s ame fr audul ents cheme. See, e. g. , A m chem, 521 U
. S. at 6 2 5 (sta tin g th a t ev e n th o u g h m a ss a c c id e n t ca se s a re lik e lyto presentsi gn i fi cant i nd i vidual qu est i on s of l i abil i tyand dam ages, s uch ca s es “may , dependi ng upon the ci r cumst ance s , s at i s fythe pr edomi nance r equi r ement ”)
. I n r e Sch. A s bes t os L i t i g. , 789 F. 2d 996, 1010 ( 3d C i r . 1986)
. T hi s i s even mor e true i n a set t l em ent- on l ycl ass act i on , w here the co urtcert i fy i ng the clas s ne e d n ote xa mi ne i s s ue s of mana ge a bi l i ty . A mche m , 52 0 U. S. at620. A l l of the above , of cour s e, ar e i s s ues t o be cons i der ed by the D i s tr i ctC our ti n i t s i ndepende ntanal y s i s . B eca us e w e do not have be for e us i t s anal y s i s of the vi abi l i tyof the TILA and H O E P A c laim s, w e w ill n o t p re ter m it i ts d e c isio n . W e m e re ly concl ude thatA ppel l ant s ’ ar gum ent s m er i tm or e att ent i on than theyw er e gi ven bythe D i s tr i ctC our tas r efl ect ed i n the r ecor d. I f th e Co u r td e t e r mi n e s th a tth e TI LA a n d HOEP A c l a i ms ar e vi abl e, ther e maybe s er i ous ques t i ons w hetherthe named pl ai nt i ffs ’ i nt er es t s ar e s uffi ci ent l yal i gned w i th thos e of a bs ent cl as s m ember s as r equi r ed byR ul e 23( a)
. T he age of the named pl ai nt i ffs ’ l oans w hen the r el evantcompl ai nt s w er e fi l ed r anged f ro m tw e n ty -e ig h t m o n th s (in th e c a se o f M a th is) to f

if ty -six m onths ( i n t he ca s e of D avi s )
. J A at497. B eca us e the one- y ear 23 sta tu to ryp e rio d f

o r f ili n g a n a f

f irm a tiv e T IL A o r H O E P A c laim h a s la p se d f

o r a ll n a m e d p lain tiff

s, th e n a m e d p lain tiff

s a p p e a r to h a v e n o in c e n tiv e to m a x im ize su c h c laim s f o r th e a p p ro x im a tely 14, 000 cl as s m ember s w ho m ays t i l l r et ai n thi s val uabl e ca us e ofC lass m em b ers w h o h av e loa n s less tha n o n e-y ea r old are 24 g iv e n a h ig h e r se ttl e m e n t am o u n t. 49 act i on . F urtherm ore, w e al so no t e t hat of the n am ed p l ai nti ffs, onl yM athi s ’ l oan w as m ade w i thi n the thr ee- y earper i od for T I L A r es ci s s i on cl ai m s . O urconce rn thatthe val ue of pot ent i al T IL A a n d H O E P A re sc iss io n c laim s is n o t ad e q u a tely r epr es ent ed bythe named pl ai nt i ffs i s hei ght ened bythe fa ctthat the s ett l ementonl ydi ffe r ent i at es betw een c l as s m ember s w ho h av e loa n s tha t are less tha n o n e-y ea r old an d class m em b ers w h o h a v e lo a n s th a t ar e o ld e r th a n o n e y e a r. S e e g e n e ra lly 24 G
. M
. T rucks , 55 F. 3d at801 ( pr ovi di ng thati ntr a- cl as s confl i ct can s om et i m es be di s cerned fr om “the veryt erm s of the s e ttle m e n t” ). A l though w e r ecogni ze that“ade quat e r epr es ent at i on of a part i cul arcl ai m i s det erm i ned bythe al i gnm entof i nt er es t s of c las s m e m b e rs, n o t p ro o f o f v ig o ro u s p u rsu it o f

th e c laim ,” W a lM art S tores, Inc
. v . V isa U
. S
. A
. Inc
. , 3 9 6 F
. 3 d 9 6 , 1 1 3 (2d C ir
. 2005) , w e ar e notconvi nced ba s ed on the pr es entr ecor d thatthe n am ed p lai n ti ff

s ad eq u atelyrep rese n t th e intere sts of the e n ti re c las s. A t th e v e rylea st, c o n sid e ra tio n sh o u ld h a v e b e e n g iv e n to th e f e a sib ili tyo f

d iv id in g th e c las s in to su b -c las se s s o th a t a courtexami ni ng the pr opos ed s ett l ementcoul d have j udged the fai rness of the set t l em ent as i tapp l i ed to si m i l arl ysi tuated cl ass m ember s . See G
. M
. T rucks , 55 F. 3d at801. O urconce r n w i th cl as s couns el ’ s r epr es ent at i on ext ends t o t hei rnegot i at i on of the s ett l ement
. “C our t s exami ni ng sett lem en t cl asse s h av e e m p h asize d the s p ec ial n ee d to as su re thatcl as s couns el : ( 1) pos s es s ed ade quat e expe r i ence ; ( 2) v ig o ro u slyp ro se c u ted th e a c tio n ; an d (3 ) a c ted a t ar m ’s le n g th fr om the def

endant
. ” G
. M
. T rucks , 55 F. 3d at801. W e fi nd no re a so n to d o u b t th a t cla ss c o u n se l ar e su f f icie n tlye x p e rie n c e d to r epr es entthe cl as s , butw e ar e s tym i ed i n anal y zi ng the s econd and thi r d pr ongs of the cr i t er i a. I n G
. M
. T rucks , w e s t at ed that thes e “poi nt s r equi r e att ent i on i n vi ew of the l ack of s i gni fi cant di s coveryand the extr emel yexpedi t ed s ett l ementof q u e s tio n a b le v a lu e a c c o m p a n ie d b ya n e n o rm o u s le g a l f e e .” Id
.50 C l as s couns el admi t t ed dur i ng or al ar gum entthatno form al di s coveryw as conduct ed w hat s oever
— ei theri n K es s l er ori n anyof the fi ve cons ol i dat ed ac t i ons . W hi l e A ppel l ees s ubm i tthatform al di s coveryw as notnece s s arybeca us e of the s uffi ci encyof “i nform al di s coveryobt ai ned byC l as s C ouns el fr om w i tnes s es and form erempl oy ees , ” A ppel l ees ’ B r . at27, “w e are l oathe t o p l ace . . . dis po si t i ve w ei gh ton the p art i es’ s el f- s ervi ng r emar ks
. ” G
. M
. T rucks , 55 F. 3d at804. W i thout adequa t e expl or at i on of the abs entcl as s m ember s ’ pot ent i al cl ai m s , i ti s ques t i onabl e w hethercl as s couns el coul d have n e g o tia te d in th e irb e s t in te re s ts
. T here i s al so som e qu est i on w hetherthe ab sentcl ass m e m b e rs ’ i n te re s ts w e re s u f f ic ie n tly p u rs u e d b yc la s s c o u n s e l. W e have al r eadynot ed thatcl as s couns el neveras s ert ed c o l o r a b l e TI LA a n d HOEP A c l a i ms . Ho we v e r , th o s e c l a i ms w er e partof the s ett l ementr el eas e. Fai l ur e t o pur s ue s uch c laim s m a ysu g g e st th a t cla ss c o u n se l su b ro g a ted th e ir d u tyto the cl as s i n favorof the enorm ous cl as s - act i on fee offe r ed by defe nd ants
. Fi nal l y , w e ca nnotavoi d cons i der at i on of the i s s ue of pot ent i al col l us i on. T hi s court , as w el l as other s , have comm ent ed ext ens i vel yon the col l us i ve dange r s i nher enti n a s ett l ement - onl ycl as s act i on. See, e. g. , G
. M
. T rucks , 594 F. 2d at 11 24 ; John C
. C off

ee, Jr
. , C l ass W ars : T he D i l em m a of the M ass T o rtC lass A cti o n , 9 5 C o lum
. L
. R ev . 1 3 4 3 , 1 3 7 0 -73 (19 9 5 ); Sam uel I s s acha r off, G overnance and Legi t i m acyi n the Law of C l as s A ct i on, 1999 Sup. C t
. R ev. 337, 388 ( 1999)
. T he U ni t ed St at es C our tof A ppeal s forthe Seventh C i r cui thas not ed the p o ss ib ili tyth a t th e s e ttle m e n t a g re e m e n t is th e p ro d u c t o f a “ re v e rs e a u c tio n ,” the pr act i ce w her ebythe def endanti n a s er i es of cl as s act i ons pi cks the mosti neff

ectual cl as s l aw y er s t o negot i at e a s ett l ementw i thi n the hope thatthe di s tr i ctcourtw i l l appr ove a w eak s ett l ementthatw i l l pr ecl ude othercl ai m s agai ns tthe d e f e n d a n t. R e yn o ld s v . B e n e f

icia l N a t’l B a n k , 2 8 8 F .3 d 2 7 7 , 2 8 2 -8 3 (7 thW e r ecogni ze that E vans v. J eff D
. , 475 U
. S. 717, 734- 38 25 ( 1986) , overrul ed P ran di ni ’ s s tr i ctrul e pr ohi bi t i ng s i m ul t aneous negot i at i ons , but as s t at ed i n G
. M
. T rucks , “manyof the conc erns thatm ot i vat ed the Pr andi ni rul e r emai n, and w e s ee no r eas on w hy J eff D
. o r i t s under l y i ng pol i cyof avoi di ng rul es thati m pede s ett l ementpr ecl ude us fr om co n sider i ng the t i m i ng of fe e n eg o ti ati o n s as a fa ctor in o u r rev iew o f th e a d eq u ac yo f th e c lass’s re p re s e n ta tio n .” 5 5 F .3 d a t 8 0 4
. 51 C ir . 2 0 0 2 ); s e e a ls o B lyd e n v . M a n c u s i, 1 8 6 F .3 d 2 5 2 , 2 7 0 n .9 ( 2d C i r . 1999)
. Y etanothercourtof appe al s has not ed thati n a set t l em ent- on l yact i on , cl ass coun sel “m i gh turge a clas s se ttl e m e n t at a lo w f

ig u re o r o n a les s-th a n -o p tim a l b a sis in excha nge forr ed- carpettr eatm enton fee s . ” W ei nber gerv. G r eat N
. N eko osa C orp. , 92 5 F
. 2d 51 8, 52 4 (1stC i r. 19 91 ); see al so M ar s St eel C orp. v. C on’ l I l l
. N at ’ l B ank and Trus tC o. , 834 F .2 d 6 7 7 , 6 8 0 -8 1 (7 th C ir . 1 9 8 7 ). A s w e r ecogni zed i n Pr andi ni v. N at ’ l T ea Co. , 557 F. 2d 1015, 1021 ( 3d C i r . 1977) , ther e exi s t s a s peci al dangerof col l us i venes s w hen the att orneyfee s , os t ens i bl ys t emm i ng fr om a s epar at e agr eement , w er e negot i at ed s i m ul t aneous l yw i th the sett lem en t. S ee also G
. M
. T ruc k s, 5 5 F
. 3 d at 80 3 ; C o u rt A w ar ded A t t orneyFees , R eportof the Thi r d C i r cui tT as k For ce, 1 0 8 F
. R. D. 2 3 8 , 2 6 6 ( 1 9 8 5 )
. As i d e f r o m c l a s s c o u n s e l s ’ o wn as s ert i ons thatfee s w er e di s cus s ed af t ernegot i at i ons of the sett lem en t had co n clud ed , JA at 13 8 3 (D ec larati o n o f C arlson ), n o o th e r r e c o rd e v id e n c e s u p p o rt s s u c h a n a s s e rt io n . Fur therm or e, “eve n i f couns el di d notdi s cus s fee s unt i l aft er theyr eac hed a s ett l ementagr eement , [s uch a f act ] w oul d not al l ayourconce r n s i nce the Task For ce r ecomm ended thatfee n e g o tiatio n s b e p o stp o n e d u n til th e se ttl e m e n t w a s ju d icia lly appr oved, notm er el yunt i l the dat e the part i es al l ege t o have r eac hed an a gr eement
. ” G
. M
. T rucks , 55 F. 3d 804. 25 W e emphas i ze, as w e s t at ed above , thatw e do not pr ecl ude the pos s i bi l i tythatthe ade quacyof cl as s r epr es ent at i on can be es t abl i s hed on a mor e deve l oped r ecor d. T he D i s tr i ct C o u rt is in s tru c te d to e x a m in e c a re f u lly th is m a tte r o n re m a n d
.52 ii. T h e R u le 2 3 (b )(3 ) C riter ia T o m eetthe r equi r ement s of Fed. R
. C i v. P. 23( b) ( 3) , the D i s tr i ctC our tm us tfi nd that“ques t i ons of l aw orfac tcomm on t o t he mem ber s of the cl as s pr edomi nat e overanyques t i ons a f f e c tin g o n lyin d iv id u a l m e m b e rs, a n d th a t a c las s a c tio n is s uper i ort o otheravai l abl e met hods forthe fa i rand ef fi ci ent ad jud icati o n o f th e c o n tr o v ersy . ” T h e p red o m inan ce inq u iry tes ts w h e th e r th e p ro p o se d c las s is su f f icie n tlyc o h e siv e to w arr antadj udi cat i on byr epr es ent at i on. A m chem, 521 U
. S. at 623- 24. A pr operpr edomi nance i nqui ry“tr ai ns on the l egal or fac tual ques t i ons thatqual i fyeac h m ember ’ s cas e as a genui ne contr over s y , ques t i ons thatpr eexi s tanys ett l ement
. ” 521 U
. S. at 623. I n t hi s vei n, a pr edomi nance anal y s i s “i s s i m i l art o the r equi r ementof R ul e 23( a) ( 3) thatcl ai m s ordefe ns es of the named r epr es ent at i ves m us tbe ‘ typi cal of the cl ai m s of def ens es of the cl as s . ’ ” I d. at623 n. 18 ( quot i ng D i amond v. C har l es , 476 U
. S. 54, 76- 77 ( 1986) ( O ’ C onnor , J
. , concurr i ng i n partand con curr i ng i n judgm ent) ). Justas the record below supp ort s a f in d in g o f typ ic a lity, it a ls o s u p p o rt s a f in d in g o f p re d o m in a n c e . A l l pl ai nt i ffs ’ cl ai m s ar i s e fr om the s ame al l eged f r audul ent s c h e me . Th e p r e s e n c e o f p o t e n t i a l s t a t e l a w o rf

e d e r a l c l a i ms th a t w e re n o t as se rte d b yth e n a m e d p lain tiff s d o e s n o t d e f

e a t a fi ndi ng of pr edomi nance . See I n r e Sch. A s bes t os L i t i g. , 789 F. 2d 996, 1010 ( 3d C i r . 1986) ( aff i r m i ng cl as s cert i fi cat i on bas ed on cr edi bl e “s how i ng, w hi ch appa r ent l ys at i s fi ed the d istric t co u rt, th a t cla ss c e rtific a tio n [ d id ] n o t p re se n t in su p e ra b le o b s ta c le s ” re la tin g to v a ri a n c e s in s ta te la w ). T h e su p e rio rityre q u ire m e n t as k s a d istric t co u rt “ to balance, i n term s of fairness and effici ency , the m eri t s of a clas s act i on agai ns tthos e of ‘ al t ernat i ve ava i l abl e met hods ’ of adj udi cat i on. ” G eor gi ne v. A m chem Prods
. , I nc. , 83 F. 3d 610, 63 2 ( 3d Ci r . 19 96 ) , a ff’ d, 52 1 U. S. 59 1 ( 19 97 )
. Fe d. R. Ci v. P. 2 3 (b)(3 ) i n stru cts th at th e m att ers p erti n en t t o this i n q u iry in c lu d e : (A ) th e in ter e st o f

m e m b e rs o f

th e c las s in in d iv id u a lly c o n tr o l l i n g th e p r o s e c u t i o n o rd e f e n s e o f s e p a r a t e a c t i o n s ; ( B) the ext entand natur e of a nyl i t i gat i on conce rni ng the contr over s yal r eadycomm ence d byoragai ns tm ember s of the53 cl as s ; ( C ) the des i r abi l i tyorundes i r abi l i tyof conc entr at i ng the l i t i gat i on of the cl ai m s i n the part i cul arforum ; [and] ( D ) the di ffi cul t i es l i kel yt o be enc ount er ed i n the managementof a cl as s act i on. I d
. W e f i n d n o r e a s o n , a n d A p p e l l a n t s f a i l t o o f f e ra n y, w h y a R u le 2 3 (b )(3 ) c las s a c tio n is n o t th e su p e rio r m e a n s to a d ju d ica te th is m a tte r. T he r ecor d befor e us r efl ect s a s m al l num berof i ndi vi dual s ui t s agai ns tdefe ndant s ar i s i ng fr om the Shum w ays cheme, ind icati n g a lac k o f in terest i n ind ividu al pro sec u ti o n . In re P rudenti al , 14 8 F
. 3d at31 6. T he p res ence o f cert ai n clas s m ember s w i th s i gni fi canti ndi vi dual H O E PA cl ai m s m ay couns el agai ns ta fi ndi ng of s uper i or i ty , butthes e i ndi vi dual s can o p t-o u t an d p u rsu e th e ir c laim s in d iv id u a lly . In re W a rf a rin Sodi um A nt i trus tL i t i g. , 391 F. 3d 516, 534 ( 3d C i r . 2004)
. I f a s ubs t ant i al num berof s uch i ndi vi dual s r emai n i n the cl as s , the u se o f su b classe s m ayb e a p p rop ri ate. Se e g en era ll yIn re P ru d e n tial, 1 4 8 F .3 d a t 3 1 6 n .5 8 . F in a lly , the f a c t th a t ce rta in c las s m e m b e rs m a yh a v e se p a ra te c laim s re su lti n g in m anage abi l i typr obl ems does notchange the r es ul t
. “C onfr ont ed w i th a r eques tfors ett l ement - onl ycl as s cert i fi cat i on, a di s tr i ct courtneed noti nqui r e w hetherthe ca s e, i f tr i ed, w oul d pr es ent i ntr act abl e managementpr obl ems . . . forthe pr opos al i s that ther e be no tr i al
. ” A m chem, 521 U
. S. at620 ( i nt ernal ci t at i ons a n d q u o ta tio n s o m itte d ). iii . S u m m a ryo f

R u le 2 3 A n a ly sis W e the ref

o re c o n clud e p reli m inaril yb ase d o n the re co rd befor e us thatal l of the r equi r ement s of Fed. R
. C i v. P. 23( a) can be metw i th t he exc ept i on of the ade quacyof r epr es ent at i on, w hi ch r equi r es addi t i onal anal y s i s . O n r emand, the D i s tr i ct C our ts houl d paypart i cul aratt ent i on t o the pr eval ence of col or abl e TILA , H O E PA , and othercl ai m s thatthe i ndi vi dual cl ass m em bers m ayhav e w hich w ere notassert ed b ycl ass c o u n se l in th e c o n so lid a ted c o m p lain t (o r p re su m a b lyin se ttl e m e n t n e g o tiatio n s). F in a lly , if th e D istric t C o u rt w e re to f in d th a t cla ss c e rtific a tio n is a p p ro p ria te, th e C o u rt sh o u ld det erm i ne w hethers ubcl as s es ar e nec es s aryorappr opr i at e bas ed54 on the ab ov e fi nd i ng s. B . T h e D istric t C o u rt’s O rd e rs I n v a lid a tin g O p t-O u ts A ppel l ant s chal l enge the D i s tr i ctC our t ’ s O ct ober14, 2003 O r deri nval i dat i ng al l s ol i ci t at ed opt

- outr eques t s , di r ect i ng th e S e ttl e m e n t A d m in istra to r to m a il cu ra tiv e n o tice s to m ember s of the cl as s w ho opt ed- out , and barr i ng A ppel l antl aw fi rm s fr om com m un i cat i ng w i th m em bers of t he clas s unles s theyfirstsu b m itted th eir pro p o sed co m m u n icati o n s to the C o u rt forappr oval
. W e r evi ew thi s O r derforan abus e of di s cr et i on. G u lf O il C o . v . B ern ard , 4 5 2 U
. S
. 8 9 , 1 0 0 (19 8 1 ). B eca us e the adva nt age of cl as s act i on l i t i gat i on comes a t th e c o st o f

b in d in g a b se n t cla ss m e m b e rs th ro u g h th e re s ju d ica ta eff ectof l i t i gat i on overw hi ch theyl ack c ontr ol , the di s tr i ct c o u rts m u st c lo se lym o n ito r th e n o tice p ro c e ss a n d tak e ste p s to s afe guar d cl as s m ember s fr om “unauthor i zed [ and] m i s l eadi ng comm uni cat i ons fr om the part i es orthei rcouns el
. ” Erha r dtv. P ru d e n tia l G ro u p , In c ., 6 2 9 F .2 d 8 4 3 , 8 4 6 (2 d C ir . 1 9 8 0 ). D istric t co u rts h a v e “ b o th th e d u tya n d th e b ro a d a u th o rityto e x e rc ise c o n tro l o v e r a c las s a c tio n a n d to e n ter a p p ro p ria te o rd e rs g o v e rn in g th e c o n d u c t o f c o u n se l an d p a rties .” G u lf O il, 452 U
. S. at100. R ul e 23( d) pr ovi des : “I n the conduc tof ac t i ons to w h ich th is ru le a p p lied , the c o u rt m a ym a k e a p p ro p ria te or der s : . . . ( 3) i m pos i ng condi t i ons on the r epr es ent at i ve part i es oron i nt ervenor s . . . [and] ( 5) deal i ng w i th s i m i l arpr ocedur al m a tte rs .” F e d . R . C iv . P . 2 3 (d ). H ow ever , a r emedys houl d be r es tr i ct ed t o the mi ni m um n e c e ss a ryto c o rre c t th e e f f e c ts o f im p ro p e r c o n d u c t u n d e r R u le 23. C ol es v. M ar s h, 560 F. 2d 186, 189 ( 3d C i r . 1977)
. T he S u p re m e C o u rt m a d e c lea r in G u lf O il th a t: [A ] n or derl i m i t i ng comm uni cat i ons betw een pa r t i es and pot ent i al cl as s m ember s s houl d be bas ed on a c l ear r ecor d and s peci fi c fi ndi ngs thatr efl ecta w ei ghi ng of the nee d fora l i m i t at i on and the pot ent i al i nt er fer ence w i th t he r i ght s of the part i es . . . . O nl ys uch a det erm i nat i on can e ns ur e thatthe courti s fur ther i ng, r atherthan hi nder i ng, the pol i ci es embodi ed i n the55 F e d e ra l R u le s o f

C iv il P ro c e d u re , e s p e c ia lly R u le 2 3
. . .

. I n addi t i on, s uch a w ei ghi ng - - i dent i fy i ng the pot ent i al abus es bei ng addr es s ed -

- s houl d r es ul ti n a car eful l ydr aw n or derthatl i m i t s s peec h as l i t t l e as pos s i bl e, cons i s t entw i th the r i ght s of the part i es under the cir cum st ances. 452 U
. S. at101- 102; s ee a l s o C ol es , 560 F. 2d at189 ( “[T] o the e x ten t th a t th e d istric t co u rt is e m p o w e re d
. . . to r e stric t ce rta in comm uni cat i ons i n or dert o pr eventfrus tr at i on of the pol i ci es of R u le 23 , itm ayn o t exe rcise the p o w er w ith o u t a sp ec ifi c re co rd sh o w in g b yth e m o v in g p a rtyo f th e p a rticu lar a b u se s b yw h ich it i s thr eat ened. M or eover , the di s tr i ctcourtm us tfi nd thatthe s how i ng pr ovi des a s at i s fac t orybas i s forr el i ef a nd thatthe r el i ef s oughtw oul d be cons i s t entw i th the pol i ci es of R ul e 23 gi vi ng expl i ci tcons i der at i on t o the narr ow es tpos s i bl e r el i ef w hi ch w o u ld p rotec t th e re sp ec ti v e p arti es.”). T h e d is tr ic t c o u rt in G e o rg in e v . A m c h e m P ro d s ., In c ., 160 F. R
. D
. 478 ( E
. D
. Pa. 1995) , fac ed a f actual s i tuat i on s i m i l ar t o t he one thatfac es us . Sever al l aw fi r m s s entm i s l eadi ng s ol i ci t at i ons t o m ember s of the pot ent i al s ett l ementcl as s , ur gi ng them t o opt - outort o obj ectt o the fa i rnes s of a pr opos ed s ett l ement
. B ythe opt

- outdat e, appr oxi m at el y201, 654 exclusi on request s w ere fi l ed. A ft er ext ensi ve fa ctual fi nd i ng s, the courtdet erm i ned thatthe s ol i ci t at i ons byout s i de couns el con t ai ned m i sst at em ents , “l i kelycon fused and m i sl ed clas s m ember s , caus ed a hi gh num berof opt

- out s , and ther efor e, had an adve r s e ef

fec ton the admi ni s tr at i on of j us t i ce. ” 160 F. R
. D
. at 498. T he court ’ s fas hi oned r emedyw as t o i nval i dat e al l opt - out r eques t s , pr ovi de cur at i ve not i ce t o thos e w ho had opt ed- out , and es t abl i s h a s econd opt

- outper i od. I d. at502. I tr eas oned that su c h a c tio n w a s ju stif

ied u n d e r b o th th e c o u rt’s a u th o rityto govern cl as s act i on pr ocee di ngs underFed. R
. C i v. P. 23( d) and the r equi r ementthati tens ur e thatal l cl as s m ember s r ece i ve the
“ b e s t n o tic e p ra c tic a b le ” u n d e r F e d . R . C iv . P . 2 3 (c ). S im il ar a cti o n h as b ee n take n b yo ther c o u rt s. S ee In re F ed
. S k yw alk C ase s, 9 7 F
. R
. D
. 3 7 0 , 3 7 4 (W
. D
. M o . 1 9 8 3 ); I m pervi ous Pai ntI ndus
. , I nc. v. A s hl and O i l , 508 F. Supp. 720,W hi l e i tm aybe true thatout s i de couns el pl ayan 26 i m por t antr ol e i n hel pi ng abs ent c la s s m ember s eval uat e the d e c is io n o f

w h e th e r t o o p t- o u t o f

th e s e ttle m e n t c la s s , s e e , e .g ., D a v id F . H e rr , M a n u a l f o r C o m p le x L itig a tio n § 2 1 .3 1 1 (4 th e d .) ( pr ovi di ng i n s t andar d not i ce f or m thatcl as s m ember s coul d ei ther r et ai n thei row n l aw y er s orcont act cl as s couns el foradvi ce) ; Fed. R
. C i v. P. 23( c) ( 2) ( B ) ( s t at i ng that“[f ] oranycl as s cert i fi ed under R ul e 23( b) ( 3) , the court m us t di r ect t o cl as s m ember the bes tnot i ce pr act i cabl e under the ci r cumst ance s , i ncl udi ng . . . not i ce . . . that a cl as s m emberm ayent eran ap p ea ran ce t hr ough couns el i f the m embers o des i r es ”) , i tw oul d be di si ngenuous t o s ugges tthat ou t si de coun sel act sol el y from a desi re t o s erve c las s m em bers’ in ter e sts
. S im p ly p u t, th o se law f irm s h a v e a p e c u n iar yin ter e st in s ol i ci t i ng opt - out s orobj ect or s ; the gr eat ernum berof opt

- out s or obj ect or s , the l es s l i kel y the pr opos ed s ett l ementw i l l s ur vi ve, and the more l i kel ythatthe l aw fi r m s w i l l have the opportuni tyt o br i ng 56 722 ( D
. K y . 1981) ; s ee a l s o D avi d F. H err , M anual forC om pl ex L i t i gat i on § 21. 33 ( 4th ed. ) ( “O bj ect or s t o a cl as s s ett l ementor th e ir a tto rn e y s m a yn o t co m m u n ica te m isle a d in g o r in a c c u ra te sta tem e n ts to c las s m e m b e rs a b o u t th e ter m s o f a se ttl e m e n t to i nduce them t o fi l e obj ect i ons ort o optout
. I f i m pr oper comm uni cat i ons occur , cur at i ve ac t i on m i ghtbe nec es s ary , s uch a s e x ten d in g d e a d lin e s f o r o p tin g o u t . . . o r v o id in g im p ro p e rly s o lic ite d o p t o u ts a n d p ro v id in g a n e w o p p o rt u n ity to o p t o u t.” ). T he D i s tr i ctC our ti n thi s cas e had s i m i l arauthor i tyover the cl as s act i on s ett l ementpr oces s . M i s l eadi ng comm uni cat i ons bys ol i ci t i ng couns el have a detr i m ent al eff ecton the cl as s not i ce p ro c e d u re a n d , th e re f

o re , o n th e f

a ira d m in is tr a tio n o f

ju s tic e . See gene r al l yG r eenf

i el d v. V i l l agerI ndus
. , I nc. , 483 F. 2d 824, 831- 32 ( 3d C i r . 1973) ( s t at i ng thatcl as s act i on pr ocedur e “w hi ch has a fo rm i dab l e, i f no ti rr et ri evab l e, effect on sub st anti ve ri gh t s, c a n c o m p o rt w ith c o n stitu tio n a l sta n d a rd s o f d u e p ro c e ss o n lyif

. . . the ‘ bes tnot i ce pr act i cabl e underthe ci r cumst ance s i ncl udi ng i ndi vi dual not i ce. . . ’ ” i s gi ven) ; I m pervi ous Pai nt Ind. , 50 8 F
. S up p. at72 3 (“I ti s ess enti al that the clas s m em bers’ deci s i on t o part i ci pat e ort o w i thdr aw be made on the bas i s of ind ep en d en t ana ly sis of [th eir] ow n self-interest. ”). 26th e iro w n s u its in s e a rc h o f lu c ra tiv e a tto rn e yf

e e s . A p p ell ee s filed th eir j o int m o ti o n w ith the D istri ct C o u rt 27 on O ct ober 6, 2003. T he C our tgr ant ed the j oi ntm ot i on on O ct ober 1 4 , 2 0 0 3 (th e d ayfo ll o w ing the C o lum b u s D ayh o li d ay ). B eca us e of the br oad s cope of the O r der, so m e of the 28 A p p e llan t law f

irm s w e re p re c lu d e d f

ro m c o m m u n ica tin g w ith cl i ent s w h o had r et ai ned them befor e the fi r s topt - outper i od and 57 H ow ever , the D i s tr i ctC our tnevers peci fi ed w hi ch p o rtio n s o f

th e so licita tio n lette rs w e re o b jec tio n a b le. G u lf

O il, 452 U
. S. at102. I tconduct ed no evi dent i aryhear i ng, s etno b rie f in g sc h e d u le, a n d g a v e A p p e llan ts n o p ra c tica b le oppor tuni tyt o be hea r d. T he O ct ober14, 2003 O r derpr ovi ded 27 onl ythat : “[f

] orgood caus e, the C our ti nval i dat es and dec l ar es voi d al l s ol i ci t ed opt

- out s bycl as s m ember s fr om G eor gi a, M is s o u ri , Il lin o is , M a ryla n d , F lo ri d a a n d A la b a m a .” J A a t 1 4 3
. T h e D is tr ic t C o u rt d id n o t s ta te w h a t s u c h “ g o o d c a u s e ” w a s . A s n o ted e a rlier , the D istric t C o u rt sim p lyu se d v e rb a tim the pr opos ed O r derpr ovi ded bythe s ett l i ng part i es . T hi s r an afoul of the G ul f O i l hol di ng r equi r i ng s peci fi cat i on and art i cul at ed w ei ghi ng of the r el evantfac t or s t o ens ur e thatthe chos en r emedybe r es tr i ct ed t o the mi ni m um nece s s aryt o corr ect the al l eged mi s conduct
. B eca us e the D i s tr i ctC our tdi d not fol l ow the r equi r ement s of G ul f O i l , w e ca nnots us t ai n the p o rtio n s o f

th e O c to b e r 1 4 , 2 0 0 3 O rd e r in v a lid a tin g th e o p t-o u ts orthe O ct ober17, 2003 O r derdecl i ni ng t o r evi s i tthe ea r l i er O r der
. O n r emand, the D i s tr i ctC our ts houl d r eexa m i ne the s o l i c i t a t i o n l e t t e r s , s p e c i f y th e m i s l e a d i n g s t a t e m e n t s ( i f a n y) m akes s peci fi c fi ndi ngs of fa ctw i th r es pectther et o and, aft er hear i ng fr om both cl as s couns el and A ppel l ant s ’ couns el , fas hi on a n ew n o ti ce to the class m em b ers w h o se o p t- o u ts w ere canc el l ed, expl ai ni ng the s i tuat i on and gi vi ng them a new o p p o rtu n ityto o p t-o u t. Fur therm or e, i ti s i m per at i ve thatw e comm enton the br oad and s w eepi ng natur e of the D i s tr i ctC our t ’ s ban on c o m m u n ica tio n s f

ro m A p p e llan ts’ c o u n se l. A s n o ted in G u lf 28w hom theyr epr es ent ed i n pendi ng l i t i gat i on. A l s o pert i nent i s the fac tthatL egg subm i t t ed a pr opos ed com m uni cat i on t o the D i s tr i ct C o u r t o n O c to b e r 1 6 , 2 0 0 3 . T h e C o u rt, ap p a re n tlyg ro u p in g it tog ethe r w ith the oth er A p p ell an t law firm s’ m o ti o n s to rec o n side r, d e n i e d i t wi th o u t d i s c u s s i o n o r r e f e r e n c e i n i t s Oct o b e r 1 7 , 2003 O rd e r.
R u le 2 3 (c )(2 )(B ) sta tes th a t:

29 F or any cl ass cert i fi ed und er R ule 23 (b) (3) , the co urtm ust di r ect t o cl as s m ember s the bes tnot i ce pr act i cabl e underthe c ir c u m sta n c e s. . . . T h e n o tice m u st c o n c ise lya n d c lea rly st at e i n p l ai n, easi l yun derst oo d lang uag e . . . that a cl ass m emberm ayent eran appe ar ance thr ough couns el i f the m ember s o des i r es [and]
. . . thatthe courtw i l l excl ude fr om the cl as s any m ember w ho r eques t s excl us i on, s t at i ng w hen and how m ember s m ayel ectt o be exc l uded. 58 O i l , s uch r es tr i ct i ons i nvol ve “s er i ous r es tr ai nt s on expr es s i on” and ther efor e, “at[a] m i ni m um , couns el s caut i on on the partof a di s tr i ctcourti n dr aft i ng s uch an or der , and att ent i on t o w hether the r es tr ai nti s j us t i fi ed bya l i kel i hood of s er i ous abus es . ” 452 U
. S. at104. E ven i n G eor gi ne, w her e the di s tr i ctcourtm ade d e taile d f

in d in g s o f

m isle a d in g sta tem e n ts a n d p a rticu lar ly di s rupt i ve beha vi orbyout s i de couns el , the court ’ s i m pos ed rem edyw as m erel ythe inval i dati on of the fi rs tsetof o pt- ou t s, the es t abl i s hm entof a s econd opt

- outper i od, and the mai l i ng of a cur at i ve not i ce. N o comm uni cat i on r es tr i ct i ons w er e i m pos ed, and the courtexpr es s l yr ej ect ed def endant s ’ r eques tforan or der r equi r i ng futur e comm uni cat i ons betw een out s i de couns el and cl ass m em bers t o incl ud e a st at em ent di scl osi ng the law y ers ’ f in a n c ia l in te re s t in c o n v in c in g th e c la s s m e m b e rs to o p t- o u t. 160 F. R
. D
. at517. N otw i ths t andi ng ourcomm enti n not e 26, s upr a, thatthe pec uni aryi nt er es t s of out s i de couns el w arr ant speci al revi ew of thei r com m un i cat i on s t o m em bers of t he clas s, w e do nots ugges tthata pr i orr es tr ai nton comm uni cat i ons i s at a ll p ro p e r. In d e e d , the “ b e st n o tice ” p ro v isio n in R u le 2 3 (c )(2 )(B ) a f

f o rd s c las s m e m b e rs th e rig h t to c o n tac t th e ir 29 ow n att orney s t o d et erm i ne w hetherj oini ng a propo sed cl ass-59 w i de s ett l ementi s i n t hei rbes ti nt er es t s . C f. Phi l l i ps Petr ol eum C o . v . S h u tt s, 4 7 2 U
. S
. 7 9 7 , 8 1 1 (19 8 5 ). Fur ther , the D i s tr i ctC our t ’ s O ct ober17, 2003 O r der w hi ch deni ed the A ppel l antl aw fi r m s ’ m ot i on t o r econs i derthe O c to b e r 1 4 , 2 0 0 3 O rd e r sta ted : T he l ett er s m ai l ed byeac h of the fi r m s named i n the O ct ober 14 , 20 03 O rderof C ou rtt o p l ai nti ff clas s m em bers i n thi s case w er e di r ects ol i ci t at i ons forpr os pect i ve cl i ent s w hom they k n e w to b e re p re se n ted b ya n o th e r la w y e r. If th e re is n o t a r u le of pr ofes s i onal conductthatpr ohi bi t s s uch ac t i vi tyi n the j ur i s di ct i ons w her e thes e l aw y er s pr act i ce, ther e s houl d be. See gener al l yG eor gi ne v. A m chem Produc t s , 160 F. R
. D
. 478 [, 4 9 5 n .2 6 ] ( E .D . P a . 1 9 9 5 ). . . . J A at145. T he di s tr i ctcourti n G eor gi ne s ugges t ed, w i thouthol di ng, that o u tsi d e c o u n sel w h o h ad co m m u n icated w ith class m em b ers w h o w e re n o t th e ir c lien ts “ m a yh a v e v io late d th e ir e th ica l d u ty t o r efr ai n fr om comm uni cat i ng aboutthe s ubs t ance of the s ett l ementw i th cl as s m ember s r epr es ent ed byanotherl aw y er . ” 160 F. R
. D
. at495 n. 26. H ow ever , court s have r ecogni zed that cl as s couns el do notpos s es s a tr adi t i onal att orney - cl i ent r el at i ons hi p w i th abs entcl as s m ember s . See C obel l v. N or t on, 212 F. R
. D
. 14, 17 ( D
. D
. C
. 2002) ; cf. G r eenf i el d, 483 F. 2d at 8 3 2 (p ro v id in g th a t cla ss c o u n se l h a s “ f id u c iar y ” re latio n sh ip wi th a b s e n tc l a s s me mb e r s ) ; I n r e S h e l l Oi l Re f i n e ry , 1 5 2 F
. R. D. 5 2 6 , 5 2 8 ( E
. D
. L a . 1 9 8 9 ) ( s t a t i n g th a t“ c o n s tru c t i v e ” a t t o rn e yc l i e n tr e l a t i o n s h i p e x i s t s o n c e o p t - o u tp e r i o d h a s c l o s e d )
. As s t at ed i n I n r e M cK es s on H B O C , I nc. Sec. L i t i g. , 126 F. Supp. 2 d 1 2 3 9 (N .D . C a l. 2 0 0 0 ), W hil e l ead co un sel ow es a gen eral i zed d utyt o u nn am ed clas s m e m b e rs, th e e x iste n c e o f su c h a f id u c iar yd u tyd o e s n o t cr e a te an inv iolate att o rne y -cli en t r elati o n sh ip w ith ea ch an d ev ery m emberof the put at i ve cl as s . T aken t o an extr eme, l ead p lai n ti ff ’s l o g ic su g g ests that p u tat ive c lass m em b ers a re for everw al l ed off

fr om anyeff

or tats ol i ci t at i on, a pr opos i t i onT o be s ur e, ther e i s a di s t i nct i on betw een the u ni l at er al 30 a c tio n o f a c las s m e m b e r w h o se e k s the a d v ice o f o u tsid e c o u n se l, oft en hi s or her pr i orcouns el , and the uns ol i ci t ed comm uni cat i ons f ro m o u ts id e c o u n s e l d e s ig n e d to d is ru p t a p ro p o s e d s e t tle m e n t. H ow ever , the Supr eme Court , as w el l as thi s court , has comm ent ed on the i m por t ance of ens ur i ng thatcl as s m ember s m ake a n i nform ed dec i s i on w hethert o r emai n i n a pr os pect i ve cl as s . See gener al l yA m . Pi pe & C o n st r . C o. v. U t ah, 414 U
. S. 538, 549 (19 7 4 ); In re C en d an t C o rp. L it ig., 2 6 4 F
. 3 d 2 0 1 , 2 5 2 (3d C ir
. 2 0 0 1 ). W e al s o emphasi ze thatw e do notcondone m i s l eadi ng s o l i c i t a t i o n l e t t e r s . W e a r e n o tf r e e t o b a rwho l e s a l e s o l i ci t at i on l ett er s i n l i ghtof the Supr eme C our t ’ s deci sion s. See Fl a. B arv. W e n t F o r I t, I n c ., 5 1 5 U .S . 6 1 8 (1 9 9 5 ); B a te s v . S ta te B a r o f A ri z ., 4 3 3 U .S
. 3 5 0 (1 9 7 7 ). H o w e v e r, if th e D istric t C o u rt f in d s th a t all ors om e of t he l ett er s s ent i n thi s cas e w er e m at er i al l ym i s l eadi ng, 60 thats eems uns uppor t abl e. I d. at1245; s ee a l s o M or i s kyv. Pub. Ser v. E l ec. & G as C o. 191 F. R
. D
. 419, 424 ( D
. N
. J
. 2000) ( pr ovi di ng thatcl as s couns el coul d notas s ertatt orney - cl i entpr i vi l ege ove rques t i onnai r es co m p let ed b yp u tat ive c lass m em b ers); 5 A lba C o n te & H erb ert B
. N ew ber g, N ew ber g on C l as s A ct i ons § 15: 16 ( 4th ed. 2002) ( s t at i ng thatonce opt - outper i od ends “[t ] he att orney s forthe cl as s have a s s um ed fi duci aryobl i gat i ons orcons truct i ve att o rne y -cli en t st atus w ith resp ec t t o the c lass”). W e h a v e a l r e a d yn o t e d th a tF e d
. R. Ci v . P
. 2 3 ( c ) ( 2 ) ( B) expl i ci t l ypr ovi des “thata cl as s m emberm ayent eran appea r ance thr ough couns el i f the mem bers o des i r es . ” I ndeed, the or i gi nal not i ce t o t he cl as s i nform ed cl as s m ember s thatthey coul d “di s cus s [the pr opos ed s ett l ement ] w i th y ourow n att orney o r a p p e a r th ro u g h y o u r o w n a tto rn e y .” J A a t 3 6 0 (e m p h a sis o m itt e d ). T o a c c e p t th e D istric t C o u rt’s d e ter m in a tio n th a t a com m un i cat i on betw een o uts i de co un sel and an ab sentcl ass m e m b e r w o u ld b e a v io latio n o f a n a tto rn e y ’s e th ica l d u tyw o u ld e ss e n tiallye v isc e ra te th is rig h t. 30i ti s fr ee t o so h old and, am on g o ther things, ce n su re tho se r es pons i bl e. 61 C
. T he M ot i ons t o I nt ervene A ppel l ant s cont end thatthe D i s tr i ctC our terr ed by deny i ng thei rm ot i ons t o i nt ervene a s m att erof r i ghtunderFed. R
. C i v. Pr
. 24( a) ( 2) or , i n the al t ernat i ve, perm i s s i bl yunderFed. R
. C i v. P
. 24 (b) (2)
. 2 H erber tB
. N ew berg, N ew berg on C l ass A cti o n s § 1 1 :56 (2d ed
. 1 9 8 5 ). I ti s axi om at i c thatt o i nt ervene a s a mat t err i ghtunder R ul e 24( a) ( 2) the pr os pect i ve i nt ervenorm us tes t abl i s h that : “( 1) the ap pli cat i on for i nterven t i on i s t i m el y ; (2) the ap pli cant has a s uffi ci enti nt er es ti n t he l i t i gat i on; ( 3) the i nt er es tm aybe aff ect ed ori m pai r ed, as a pr act i cal m att erbythe di s pos i t i on of the ac t i on; and ( 4) the i nt er es ti s notadequa t el yr epr es ent ed by an exi s t i ng partyi n t he l i t i gat i on. ” H arr i s v. Perns l ey , 820 F. 2d 592, 596 ( 3d C i r . 1987)
. I n the cl as s act i on cont ext , the s econd and thi r d pr ongs of the R ul e 24( a) ( 2) i nqui ryar e s at i s fi ed bythe verynatur e of Rul e 23 r epr es ent at i ve l i t i gat i on. T her efor e, w hen abs entcl as s m ember s s eek i nt ervent i on as a mat t erof r i ght , the gr avamen of a c our t ’ s anal y s i s m us tbe on the t i m el i nes s of the m o tio n to in te rv e n e a n d o n th e a d e q u a c yo f re p re s e n ta tio n . T i m el i nes s of an i nt ervent i on r eques t“i s det erm i ned by the t ot al i tyof the ci r cumst ance s . ” U ni t ed St at es v. A l can A l um i num , I nc. , 25 F. 3d 1174, 1181 ( 3d C i r . 1994)
. A m ong the fac t or s t o be cons i der ed ar e: ( 1) the s t age of the pr ocee di ng; ( 2) the pr ej udi ce thatdel aym aycaus e the part i es ; and ( 3) the r eas on fo r th e d elay
. M o u n tai n T o p C o n d o . A ss’n v . D av e S tabb ert M as t erB ui l der , I nc. , 72 F. 3d 361, 369 ( 3d C i r . 1995)
. I n the pr es entcas e, m ember s of the nat i onw i de cl as s fi r s tl earned of the pr opos ed s ett l ementi n ear l yA ugus t2003 w hen theyr ece i ved the N ot i ce of

C l as s A ct i on Set t l ement
. A l though s i l enton the i s s ue of i nt ervent i on, the N ot i ce pr ovi ded thatal l opt - out e l e c t i o n s mu s tb e r e c e i v e d b yOc t o b e r1 , 2 0 0 3
. Th e t i me f r a me i n w hi ch a c l as s m emberm ayfi l e a mot i on t o i nt ervene chall eng i ng the ad equ acyof class repr esent at i on m ustbe at l east a s l o n g a s th e t i m e i n w h i c h s /h e m a yo p t - o u to f th e c l a s s . We62 r ecogni zed i n M cK ow an Low e & C o. v. J as m i ne, L t d. , 295 F. 3d 3 8 0 (3 d C ir. 2 0 0 2 ), th a t: N otunt i l the exi s t ence and l i m i t s of the cl as s have been e s t abl i s hed and not i ce of m ember s hi p has b e e n se n t d o e s a c las s m e m b e r h a v e a n yd u tyto t ake not e of the s ui tort o exer ci s e any re sp o n sib ili tyw ith re sp e c t to it i n o rd e r to p ro f it fr om the eve ntual out come of t he ca s e. 295 F. 3d at384 ( i nt ernal ci t at i on and quot at i ons om i t t ed) ; cf. G r aham C
. L i l l y , M odel i ng C l as s A ct i ons : T he R epr es ent at i ve S u it a s a n A n a lytic T o o l, 8 1 N e b . L . R e v . 1 0 0 8 , 1 0 3 5 (2 0 0 3 ). W e th e re f

o re c o n c lu d e th a t b e c a u se A p p e llan ts’ m o tio n to i nt ervene f

i l ed on O ct ober1, 2003 w as w i thi n the opt

- outper i od, itw as p resu m p ti v elyti m ely
. A lth o u g h the D istri ct C o u rt c o n c lu d e d th a t g ra n tin g th e m o tio n to in ter v e n e w o u ld “ lik e ly del aythe pr ocee di ng t o the pr ej udi ce of the C l as s , ” J A at146, thi s concl us i on w as unacc om pani ed byanyr eas oni ng or d iscu ssion
. T h e m o ti o n to interv en e w as f il ed six w ee k s b ef

o re the d ate sc h ed u led f

o r th e f airne ss h ea ri n g an d the D istri ct C o u rt di d notexpl ai n w hyperm i t t i ng i nt ervent i on atthatj unctur e of th e p ro c e e d in g s w o u ld h a v e re s u lte d in p re ju d ic e . I n V i r gi ni a v. W es t i nghous e El ec. C orp. , 542 F. 2d 214 ( 4th C i r . 1976) , the courts t at ed that , “[w ] hen the partys eeki ng i nt ervent i on has the s ame ul t i m at e obj ect i ve as a partyt o the su it, a p re su m p tio n a rise s th a t it s in ter e sts a re a d e q u a tely r epr es ent ed .
. . . ” 542 F. 2d at216. T o over come t he pr es um pt i on of ade quat e r epr es ent at i on, the pr opos ed i nt ervenor m us tor di nar i l ydemonstr at e adve r s i tyof i nt er es t , col l us i on, or n o n fe asa n ce o n the p art of a p artyto the su it
. S ee , e.g., Int’l T ank Ter m i nal s , L t d. v. M / V A cadi a For es t , 579 F. 2d 964, 967 (5 th C ir . 1 9 7 8 ). U nl i ke the s i tuat i on of an or di narycl as s act i on w her e the d istric t co u rt, as p a rt o f th e c las s c e rtific a tio n p ro c e d u re , w ill have unde r t aken a n i ndepende nti nqui ryi nt o the ade quacyof the named par t i es ’ and cl as s couns el ’ s r epr es ent at i on, Fed. R
. C i v. P
. 23 (a) (4) ; A m chem , 52 1 U
. S
. at62 6, i n a set t l em ent- on l ycl assI n l i ght of ourabove de ci s i on t o r emand on t he ques t i on 31 of i n t e r v e n t i o n a s a ma t t e r o f r i g h t , we n e e d n o t d i s cus s t he al t ernat i ve ar gum entr egar di ng perm i s s i ve i nt ervent i on.
63 act i on the di s tr i ctcourtw i l l oft en mer el y“condi t i onal l y ” ce r t i fy th e c las s. T h u s, w h e n A p p e llan ts h e re f iled th e ir f

irst m o tio n to in ter v e n e o n O c to b e r 1 , 2 0 0 3 , the D istric t C o u rt w a s f a c e d w ith the i s s ue of c l as s couns el ’ s adequa cyof r epr es ent at i on and pos s i bl e col l us i on as m att er s of fi r s ti m pr es s i on. T he O ct ober 21, 2003 O r derdeny i ng i nt ervent i on m er el ys t at ed w i thoutany acc om pany i ng r eas oni ng that“the pr opos ed interve n o rs/ o b

jectors h av e n o t prese n ted a n yev iden ce to su p p o rt thei rcont ent i on thatthe Sett l ementati s s ue i s col l us i ve orthat C las s C o u n se l ar e in a d e q u a te . . . . ” JA a t 1 4 6 . W e a re c e rta in ly noti n a pos i t i on t o char act er i ze the s ett l ementas col l us i ve, but forthe r eas ons s etfor th above, the ci r cumst ance s of the pr es ent ca se re q u ir e c lose r scru ti n yb ythe D istri ct C o u rtthan itap p ea rs t o have gi ven. C l as s couns el fai l ed t o as s ert , i nt eral i a, w hat appea rt o be fa ci al l yvi abl e TILA and H O E PA cl ai m s , conduct ed n o f o rm a l d is c o v e ry, a n d n e g o tia te d a n e x tr e m e ly g e n e ro u s f e e . O n re m a n d th e D istric t C o u rt sh o u ld c o n sid e r, b a se d o n a f u ll r ecor d, w hetherA ppel l ant s have metthei rbur den of s how i ng c o llu sio n w a rra n tin g g ra n tin g o f A p p e llan ts’ m o tio n to i nt ervene. 31 T o b e cl ear, w e are i n n o w aysugg est i ng that absentcl ass m e m b e rs w h o m e re lye x p re ss d iss a tisf a c tio n w ith sp e c if

ic as pect s of the pr opos ed s ett l ementorthatatt orney s ( w ho, aft er fin d ing o n e o r m o re c lass m em b ers a s cli en ts, an d w ish to sh are i n t he forthcomi ng fee ) , have the r i ghtt o i nt ervene. T he goal s of R u le 2 3 w o u ld b e s e ri o u s ly h a m p e re d if th a t w e re p e rm itte d
. See A m . Pi pe and Constr . C o. v. U t ah, 414 U
. S. 538, 551 ( 1974) ( s t at i ng thatfi l i ng of i ndi vi dual m ot i ons t o j oi n ort o i nt ervene w as “pr eci s el ythe mul t i pl i ci tyof ac t i vi tyw hi ch R ul e 23 w as d e s ig n e d to a v o id ” ); In re P ru d e n tia l, 1 4 8 F .3 d a t 3 1 3
. D
. A p p ell an ts’ R eq u est fo r D isco v ery A p p ell an t W alt ers c h all en g es th e D istri ct C o u rt ’s64 N ovember10, 2003 O r derl i m i t i ng di s coveryas an abus e of d iscreti o n . S p ec ifi ca ll y , this O rde r pro v ided that “the M issou ri and I l l i noi s O bj ect or s , thei ratt orney s , and anyper s on act i ng on thei rbehal f m aynoti s s ue anyfur therdi s coveryr eques t s or su b p o e n a s” w ith o u t p rio r a p p ro v a l o f th e C o u rt; tha t A p p e llan ts m ayno tpresentt est i m on yof an yw i tness atthe final fai rness hear i ng w i thoutpr i orappr oval of the C our t ; and thatal l pr i or s ubpoenas purpor t i ng t o r equi r e a w i tnes s orpartyt o att end and t es t i fyatthe fi nal fai r nes s hear i ng w er e voi d. J A at151. W e cons i derW al t er s ’ chal l enge i n l i ghtof ourpr ece dent thathol ds obj ect or s ar e “e nt i t l ed t o an opportuni tyt o devel op a recor d in suppo rtof [ their ] cont enti on s bym eans of cross exami nat i on and ar gum entt o the court
. ” G r eenf i el d v. V i l l ager I ndus
. , I nc. , 483 F. 2d 824, 833 ( 3d C i r . 1973) ; s ee a l s o G r i m es v. V it ali n k C o m m u n icati o n s C o rp., 1 7 F
. 3 d 1 5 5 3 , 1 5 5 8 (3d C ir
. 1994) ( “[T] he obj ect i ng cl as s m ember s m 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 e t t l e me n ti s u n f

a i ro ri n a d e q u a t e . ” ) ; F e d
. R. Ci v . P
. 2 3 ( c ) ( 2 ) ( B) (“ [ A ] c las s m e m b e r m a ye n ter a n a p p e a ra n c e th ro u g h c o u n se l if the mem bers o des i r es . ”)
. I n G i r s h v. J eps on, 521 F. 2d 153 ( 3d C i r . 1975) , w e r ever s ed the di s tr i ctcourt ’ s fi nal appr oval of a cl as s act i on s ett l ementand r emanded forcl ar i fi cat i on of the r ecor d, not i ng, i nt eral i a, thatthe “obj ect or. . . w as notaff or ded an ade quat e opportuni tyt o t es tbydi s coverythe s tr engths and w eakne s s es of the pr opos ed s ett l ement
. ” I d. at157. A l though w e f o u n d th a t th e o b

jec to r w a s “ e n tit led to a t lea st a re a so n a b le op po rtun i tyt o d i scovery ” againstthe p l ai nti ffs and defe nd ants , that fin d ing w as p red icated o n the to tal inad eq u ac yo f th e re co rd upon w hi ch the s ett l ementw as appr oved and the “t ot al i tyof the ci r cumst ance s s urr oundi ng the s ett l ementhear i ng” i n w hi ch the o b jector w as d en ied m ea n ing fu l parti cipa ti o n . Id. W e the ref o re con cl ud e t hat G i rs h can no tst and for the p roposi t i on that, as a g e n e ra l m a tte r, o b

je c to rs h a v e a n a b s o lu te ri g h t to d is c o v e ry. See, e. g. , I n r e Lora zepa m & C l or aze pat e A nt i trus tL i t i g. , 205 F
. R
. D
. 2 4 (D
. D
. C
. 2 0 0 1 ). O n t he otherhand, w e r ecogni zed thatdi s coverym aybe ap p rop ri ate if lead co u n sel h as n o t con d u cted ad eq u ate d isco v ery ori f the di s coveryconduct ed byl ead c ouns el i s notm ade65 av ail ab le t o o b

jectors. Se e G ir sh , 5 2 1 F
. 2 d at 15 7 ; see a lso In re Prudent i al , 148 F. 3d at325 ( hol di ng thatdi s tr i ctcourtact ed w ith in it s d iscreti o n b yli m it ing d isco v eryreq u ests o f o b jectors beca us e obj ect or s had ampl e opportuni tyt o avai l themsel ves of s ubs t ant i al di s coverypr ovi ded t o l ead c ouns el butfai l ed t o do s o ). T he D i s tr i ctC our thas di s cr et i on t o “empl oythe pr ocedur es thati tper cei ves w i l l bes tperm i ti tt o eval uat e the fai r nes s of the s ett l ement
. ” I n r e Prudent i al I ns . C o. of A m . Sal es Pr act i ces L i t i g. , 962 F. Supp. 450, 563 ( D
. N
. J
. 1997) , aff’ d, 148 F. 3d 283 ( 3d C i r . 1998) ; 2 H erbertB
. N ew ber g, N ew ber g on C l as s A ct i ons § 11: 56 ( 2d ed. 1985) ( “The cr i t er i a r el evantt o the court ’ s deci s i on of w hetherornott o perm i tdi s coveryar e the natur e and a m ountof pr evi ous di s covery , r eas onabl e bas i s for the evi dent i aryr eques t s , and numberand i nt er es t s of o b jectors.”). I n t he pr es entcas e, i ti s undi s put ed thatno form al di s coveryw as undert aken bycl as s couns el
. H ow ever , A ppel l ant W al t er s has l i t i gat ed, al bei tuns ucce s s ful l y , tw o s ui t s i nvol vi ng the s ame fr audul ents cheme i n the s t at e court s of M i s s our i
. See s upr a atPar tI
. D
. I ti s l i kel ythatW al t er s has devel oped s uffi ci entfac t s r egar di ng thi s m att erand i t s pr os pect i ve s ett l ementval ue s uch thati tw oul d be abl e t o pr es enta coge nt a n d su p p o rta b le o b

jec tio n a t th e f

a irn e ss h e a rin g . S e e B e ll A tl. C o rp . v . B o lg e r, 2 F .3 d 1 3 0 4 , 1 3 1 4 -1 5 (3 d C ir . 1 9 9 3 ). W a lters a ss e rts th a t th e D istric t C o u rt h a m p e re d its att empt s ats eeki ng di s coveryr el at ed t o a s ett l ementi n a r el at ed ca se, D u n d o n v . F ir stPlu s B an k , N o . 0 1 -40 8 -G P M (S
. D
. Il l. ), w hi ch w oul d have de m ons tr at ed thatthe s ett l ementi n the pr es entcas e w as i nadequa t e. T he s ett l i ng part i es cont end that a l th o u g h th e D u n d o n s u i tw a s b r o u g h tb y tw o o f th e a t t o rn e ys w ho r epr es entpl ai nt i ffs i n the pr es entcas e, the ca s e i s i rr el evant t o t he fa i r nes s of the pr es ents ett l ementbeca us e i ti nvol ved d if f e re n t p a rt ie s , c la im s , a n d a d if f e re n t p ro c e d u ra l p o s tu re . W e ar e i ncl i ned t o agr ee w i th the s ett l i ng part i es thatthe D i s tr i ctC our t ’ s O r derl i m i t i ng di s coveryw as notan abus e ofA ppel l antW al t er s has fi l ed a mo ti o n t o s uppl ementthe 32 re c o rd , p u rsu a n t to R u le 1 0 (e ) o f th e F e d e ra l R u le s o f

A p p e llate Pr ocedur e, t o i ncl ude pl eadi ngs , l egal m emora nda, and t es t i m ony fro m D undon, and otherpr ocee di ngs w hol l ys epar at e fr om the p re s e n t liti g a tio n . W e w ill d e n yth is m o tio n . T hi s court has m ade cl ear that the “[t ] he on lyp roper funct i on of a c our tof appe al s i s t o r evi ew the d ec isi on bel ow on the bas i s of the r ecor d thatw as befor e the di s tr i ctcourt
. ” Fas s etv. D el t a K app a E psi l on , 80 7 F. 2d 11 50 , 11 65 (3d C i r. 19 86 ); see al so Sew ak v. I m m i gr at i on & N atur al i zat i on Ser v. , 900 F. 2d 667, 673 ( 3 d C i r . 1 9 9 0 ) ( “ A s a n a p p e l l a t e c o u r tw e d o n o tt a k e t e s t i m o n y, hear evi dence or det erm i ne di s put ed fac t s i n the firstins t ance . I ns t ead, w e r el y upon a r ecor d devel oped i n thos e for a thatdo t ake evi dence and fi nd fac t s . ”)
. A l though w e have acknow l edged that i n exce pt i onal cas es , the courtm ayhave i nher ent p o w ert o al l ow a par ty to suppl ementthe r ecor d on appea l , s ee I n r e C api t al C i t i es/A B C Inc. ’s A pp l i cat i on for A ccess t o S eal ed T ranscr i pts , 9 1 3 F
. 2 d 8 9 , 9 7 (3 d C ir. 1 9 9 0 ) (l ist ing n u m b er o f f ac tors co u rt sh o u ld c o n sid e r: “ (1 ) w h e th e r th e p ro f f e re d a d d iti o n w o u ld es t abl i s h bey ond an y d oubtthe pr operr es ol ut i on of the pendi ng i s s ue; ( 2) w hetherrem an d i ng the ca s e t o the di s tr i ctcourtfor cons i der at i on o f the addi t i onal m at er i al w oul d be contr aryt o the i nt er es t s of j us t i ce a nd th e effi ci entus e of j udi ci al r es our ces ; and ( 3) w hethe r th e appeal ar os e i n the cont extof a ha beas corpus a c tio n ” ), s u c h c ir c u m s ta n c e s a re a b s e n t f ro m th e p re s e n t c a s e . 66 d iscreti o n , b u t w e a re u n ab le t o co n clus ivelyso h o ld. T h e re co rd befor e us cont ai ns no det ai l s of the D undon m att er , as i de fr om the p art i es’ un supp ort ed assert i on s. 32 Fi nal l y , w e not e thatthe D i s tr i ctC our t ’ s N ovember10, 20 03 O rderw as i ssued on l yfou r day s pri or t o the fai rness h ea ri n g . T h e O rde r, albe itp u rpo rt ing to p erm itd isco v ery r eques t s , i n al l pr act i cal r es pect s barr ed di s coveryal t ogether beca us e thos e r eques t s w er e t o have be en s ubm i t t ed fi r s tt o the C our tforappr oval
. O n r emand, the D i s tr i ctC our ti s i ns truct ed t o devel op ful l ythe r ecor d and r eeva l uat e w hetheran or der l i m i t i ng di s coveryi s appr opr i at e i n l i ghtof i t s dutyt o “empl oyT h e re leva n t com p lai n t is D av is fo r th e C B N V b o rrow ers 33 and U l ri ch fo r the G N B T bo rr ow ers . T he “q uali fy i ng st at es” ar e: C olor ado , Idaho, I lli no i s, 34 I n d i a n a , I o w a , K a n s a s , M a i n e , M a ryl a n d , M i s s o u r i , N e w J e r s e y, N or th C ar ol i na, O hi o, O kl ahoma, Penns y l vani a, S outh C ar ol i na, T e n n e ssee, U t a h , W a sh in g to n , W isc o n sin , an d W y o m in g . V irg in ia i s a “qua l i fy i ng st at e” w i th respectt o G N B T bo rr ow ers . 67 the pr ocedur es thati tper cei ves w i l l bes tperm i ti tt o eval uat e the fai r nes s of the s ett l ement
. ” I n r e Prudent i al , 962 F. Supp. at563. E
. T he Fai r nes s of the Sett l ement W e r es t at e forpurpos es of thi s s ect i on the t erm s of the s ett l ement , appr oved bythe D i s tr i ctC ourti n i t s D ece m ber4, 2003 Fi nal O r derA ppr ovi ng the C l as s A ct i on Set t l ement
. U nder the s ett l ement , the def

endant s ar e t o payup t o $33 m i l l i on t o the 44, 535 m embercl as s , w i th aw ar ds t o the cl as s m ember s r angi ng fr om $250. 00 t o $925. 00, cont i ngenton w hen the l oan cl os ed, and the borr ow er ’ s s t at e of r es i dence w hen the l oan cl os ed. T he fi rs tfact or r efl ect s the R E S P A on e-y ear s t atute of l i m i t at i on s; cl as s m ember s w ho cl os ed thei rl oans w i thi n one y earof the e a rlies t-f iled re lev a n t co m p lain t a re e n tit led to h ig h e r p a ym e n ts 33 than cl as s m ember s w hos e l oans cl os ed bef or e thatdat e. T he s econd f act orpr ovi des hi gherpaym ent s t o cl as s m ember s w ho res i de in one of tw enty -one “q uali fy i ng st at es, ” w here cl ass couns el det erm i ned thatcl as s m ember s theor et i cal l ycoul d have pur s ued s t at e- l aw cl ai m s agai ns tdefe ndant s . T he s ett l ement 34 al so w ou l d aw ard app roxi m at el y$ 8
. 1 m i l l i on i n fee s t o clas s couns el , w i th defe ndant s bear i ng the cos t s of s ett l ement a d m in is tr a tio n . J A 3 2 2 , 3 2 1
. I n excha nge, part i ci pat i ng cl as s m ember s w er e t o r el eas e anyand al l cl ai m s agai ns tdefe ndant s w hi ch w er e, orcoul d have b e e n , a s s e r t e d i n th e l i t i g a t i o n . T h e s e i n c l u d e p o t e n t i a l T I L A, H O E P A , an d v a rio u s s tate law c laim s th a t w e re n e v e r p led in anyof the s i x or i gi nal compl ai nt s ori n the cons ol i dat ed c o m p la in t.T o s uppor tthi s cont ent i on, A ppel l ant N ix has fi l ed a 35 m o tio n to su p p le m e n t th e re c o rd o n a p p e a l w ith tw o e x h ib its cons i s t i ng of a s pr eads heetand gr aph depi ct i ng al l G eor gi a l oans or i gi nat ed and r ecor ded m onthl y by C B N V and G N B T dur i ng the per i od fr om Sept ember 1, 1997 t o J ul y 31, 2004. Forthe r eas ons gi ven i n not e 30, s upr a, w e w i l l denythi s m ot i on. 68 A ppel l ant s ur ge us t o fi nd thatthe D i s tr i ctC our tabus ed i t s di s cr et i on w hen i tappr oved the s ett l ementas fai r , r eas onabl e, an d ad eq u ate. S ee G ir sh v . Jep so n , 5 2 1 F
. 2 d 1 5 3 , 1 5 7 (3d C ir
. 35 1975)
. G i ven ourdi s pos i t i on of the var i ous i s s ues expl or ed abo ve, w e fi nd i tun necessaryand i m pruden tt o ad dress d e f in itiv e ly th e s u b s ta n tiv e n a tu re o f th e s e ttle m e n t. I n Par tI I I
. A , w e det erm i ned thatthe D i s tr i ctC our tfai l ed t o cert i fypr oper l ythe s ett l ement - onl ycl as s , as r equi r ed by A m c h e m , an d w e n o ted th a t th e c u rre n t re c o rd is in a d e q u a te to supp ortthe D i stri ctC ou rt ’s fi nd i ng as t o the adeq uacyof class couns el ’ s r epr es ent at i on of al l m ember s of the cl as s . W e r emand so th a t th e D istric t C o u rt c a n m a k e a d e q u a te f in d in g s u n d e r R u le 2 3 (a ) a n d (b )( 3 ), s u p p le m e n tin g th e re c o rd if n e c e s s a ry. W e furtherdet erm i ned i n PartI I I
. B thatthe D i s tr i ct C ou rt ’s O rder(w hich i nv al i dated the fir stsetof o pt- ou t s, dir ect ed cu rat i ve n oti ces, and res tri ct ed A pp el l ant l aw fi rm s’ comm uni cat i ons w i th abs entcl as s m ember s ) r an af oul of the Supr eme C our t ’ s hol di ng i n G ul f O i l
. A s a r es ul t , w e di r ect ed the D i s tr i ctC our ton r emand t o m ake s peci fi c fa ctual fi ndi ngs j us t i fy i ng the nee d forr emedi al act i on, w hi ch mayi ncl ude i nval i dat i on of the fi r s ts etof opt

- out s . I f a r emedyi s deemed n e c e ss a ry , the D istric t C o u rt m u st c a re f u llytailo r th e re m e d yto A pp el l ants ’ s pecifi c m i scond uct. S i gn i fi cantl y , the 4 35 cl ass m e m b e rs w h o w ill b e g iv e n th e o p p o rtu n ityto re in sta te th e ir i nit i al op t -outdecis i on s com pri se nearl y1% of the t otal cl ass— a f ig u re n e a rlyd o u b le th e .5 % trig g e r th a t w o u ld a llo w d e f e n d a n ts to re sc in d th e se ttl e m e n t o f f e r. T h u s, a sig n if

ica n t p o ss ib ili ty e x ists, o n re m a n d , tha t if c las s m e m b e rs c h o o se to re -o p t-o u t in the s ame num ber s , defe ndant s m ayt erm i nat e the s ett l ementoffe r o r m a te ri a lly a lte r i ts te rm s .See, e. g. , J ul y17, 2003 O r der condi t i onal l y cert i fy i ng the 36 cl as s fors ett l ementpurpos es ; O ct ober14, 2003 O r deri nval i dat i ng class o p t- o u ts and r es tr i ct ing co m m u n icati o n s b etw ee n A p p ell an t’ s an d the c lass; N o v em b er 1 0 , 2 0 0 3 O rde r qu ash ing A p p ell an t’ s r eques tford i s c o v ery ; D ece m ber4, 2003 Pr opos ed Fi ndi ngs of Fact a n d C o n c lu s io n s o f

L a w . 69 W e do fe el obl i ged, how ever , t o comm enton the p roc ed u ral po sture su rrou n d ing the s ett lem en t pro ce ed ing s. In class a cti o n s, p arti cu larl ysett lem en t- o n lysu it s, the d istri ct co u rt h as a d u ty“to p rotec t th e m em b ers o f a class . .
. fro m law y ers forthe cl as s w ho m ay , i n der ogat i on of thei rpr ofes s i onal and fi duci aryobl i gat i ons , pl ace thei rpecuni arys el f- i nt er es tahea d of thatof the cl as s . ” R eynol ds v. B enef i ci al N at ’ l B ank, 288 F. 3d 277, 279 ( 7th C i r . 2002)
. W e have gone s o faras t o deem t he di s tr i ctj udge a “ fi duci ary ” of the cl as s . I n r e C endantC orp. L iti g ., 2 6 4 F .3 d 2 0 1 , 2 3 1 (3 d C ir. 2 0 0 1 ); se e a lso C u lv e r v . C ity of M i l w auk ee, 27 7 F
. 3d 90 8, 91 5 (7t h C i r. 20 02 ); G
. M
. T rucks, 55 F. 3d at806 ( pr ovi di ng thatdi s tr i ctcourt s have “ hei ght ened dutyt o s crut i ni ze [ a] pr e- cert i fi cat i on s ett l ement ”) ; G r antv. B ethl ehem St eel C orp. , 823 F. 2d 20, 22 ( 2d C i r . 1987)
. W e have d e c lin e d to e x p lo re w h e th e r th e se ttl e m e n t is su b sta n tiv e lyf a ir ( forthe r eas ons enunci at ed above ) , l eavi ng thatt o the D i s tr i ct C our ti n t he fi r s ti ns t ance , butther e i s l i t t l e i n the r ecor d t o gi ve u s c o n f id e n c e th a t th e D istric t C o u rt e x e rc ise d its f id u c iar yd u ty to as su re tha t th e se tt lem en t pro ce ss w as p roc ed u rall yfa ir
. W e fi nd veryl i t t l e, i f any , evi dence i n the r ecor d thatthe D i s tr i ctC our tgave the s ett l ementand i t s uni que cha r act er i s t i cs the ca r eful and compr ehens i ve s crut i nyr equi r ed underthe ci r cumst ance s . Fi r s t , vi r tual l yeveryor deri s s ued bythe D i s tr i ct C our tw as a verbat i m ornearverbat i m copyof a pr opos ed or der offe r ed bythe s ett l i ng part i es . Par t i cul ar l ytr oubl i ng ar e the 36 c irc u m sta n c e s s u rro u n d in g th e D istric t C o u rt’s v e rb a tim adopt i on of the s ett l i ng part i es ’ pr opos ed Fi ndi ngs of Factand C oncl us i ons of Law i nt o the D ece m ber4, 2003 Fi nal O r der A p p rov ing the C lass A cti o n S ett lem en t. T h e D istri ct C o u rt e n tru ste d c las s c o u n se l to p re p a re th e se f in d in g s in a n e x p a rte70 cl os ed doors es s i on hel d befor e the s ett l ementhear i ng, w hen couns el forA ppel l ant s w er e notpr es ent
. T he col l oquybetw een c las s c o u n se l an d th e C o u rt, b lo c k q u o ted in P a rt I, n o t o n ly r efl ect s the D i s tr i ctC our t ’ s fai l ur e t o i nqui r e i nt o any s ubs t ant i ve as pectof the s ett l ement , butal s o s ugges t s thatthe fai r nes s hear i ng w as a mer e form al i ty . I ts ugges t s thatthe D i s tr i ctC our thad pr e- det erm i ned i t s appr oval of the s ett l ement befo re heari ng the argu m ents of an yof the fi ve o bject ors. F u r th e r , we f

i n d th a tth e Di s tr i c tCo u r t ’ s o wn M emora ndum acc om pany i ng the D ece m ber4, 2003 O r der (a m o n g th e f

e w d o c u m e n ts d ra f

ted b yth e C o u rt itse lf

), re f lec ts poor l yon t he C our t ’ s fami l i ar i tyw i th the fa ct s and s ubs t ant i ve natur e of the ca s e bef

or e i t
. T he fi r s ttw o s ent ence s of the M emora ndum s t at e that : “Thi s i s a compl ex comm er ci al fr aud c a se . P lain tiff

s, o n b e h a lf

o f th e m se lv e s a n d a ll o th e rs s im ilarly s i tuat ed, al l ege i n t hei rcons ol i dat ed amended compl ai ntthat defe ndant s . . . act ed i n vi ol at i on of .
. . [H O E PA , R E SPA , and R IC O ] . . . , as w e ll as re late d sta te la w s.” JA a t 1 7 4 . N o t o n lyis this co n su m er f

rau d ca se (n o t a co m m erc ial ca se), bu t m o re i m por t ant l y , the gr avamen of the A ppel l ant s ’ obj ect i ons t o the fai r nes s of the s ett l ement , and an undi s put ed fa ctr efl ect ed i n the C ons ol i dat ed A m ended Com pl ai nt , s ee A pp at637- 711, i s that c las s c o u n se l d id n o t as se rt o r se e k re m u n e ra tio n f o r p o ten tially val uabl e H O E PA and TILA cl ai m s . T hi s i s the l ynchpi n of A p p e llan ts’ a rg u m e n ts th a t cla ss c o u n se l w a s n o t ad e q u a tely re p re se n tin g th e in ter e sts o f a b se n t cla ss m e m b e rs. W ith th is m isu n d e rsta n d in g o f

th e c a se b e f

o re it, it i s d if

f icu lt t o a sc e rta in h o w th e C o u rt w a s a b le to f u lf ill its d u tyto sc ru tin ize rig o ro u sly the fa i r nes s of the s ett l ement
. See G
. M
. T rucks , 55 F. 3d at805 ( “W e af fi r m the nee d forcourt s t o be eve n m or e s crupul ous than us ual i n appr ovi ng s ett l ement s w her e no cl as s has y etbeen f o rm a lly c e rt if

ie d .” ). F. T he Pet i t i on forM andamus O n M a y1 0 , 2 0 0 5 A p p e llan ts f iled a m o tio n , p u rsu a n t to 2 8 U
. S
. C
. § 2 1 0 6 , fo r reassig n m en t t o a d iffe ren t distri ct co u rt j udge, anym att er s r emanded t o the di s tr i ctcourtas partof the r el i ef a w ar ded i n t he pr es entappea l
. D ue t o the natur e of the m ot i on, i thas been doc ket ed and w i l l be cons trued as a pet i t i on71 for m and am us. 2 8 U .S .C . § 4 5 5 p ro v id e s th a t: ( a) A nyj us t i ce, j udge, orm agi s tr at e of the U ni t ed St at es sh a ll d isq u a lifyh im se lf in a n yp ro c e e d in g in w h ich h is i m part i al i tym i ghtr eas onabl ybe ques t i oned. ( b) [The j udge] s hal l al s o di s qual i fyhi m s el f i n the foll ow i ng ci rcum st ances: ( 1) W her e he ha s a per s onal bi as orpr ej udi ce conce r ni ng a party , orper s onal know l edge of di s put ed e v id e n tia ry f

a c ts c o n c e rn in g th e p ro c e e d in g s . . . . Id
. B el i efs or opini on s w hich m eri trecusal gen eral l ym ust s t em from an extr aj udi ci al s our ce. L i t ekyv. U ni t ed St at es , 510 U
. S. 540, 554 ( 1994)
. B eca us e the foc us i s on the s our ce of the j udge’ s vi ew s and ac t i ons , “j udi ci al rul i ngs al one al m os tnever cons t i tut e a va l i d bas i s forbi as orpart i al i tym ot i on. ” I d. at555 ( ci t i ng U ni t ed St at es v. G r i nnel l C orp. , 384 U
. S. 563, 583 ( 1966) )
. Si m i l ar l y , “j udi ci al r emar ks dur i ng the cour s e of a tr i al th a t ar e c ritica l o r d isa p p ro v in g o f , o r e v e n h o stile to , co u n se l, the part i es , orthei rcas es , or di nar i l ydo nots uppor ta bi as or part i al i tychal l enge. ” I d. Sect i on 455( a) m andat es an obj ect i ve r atherthan a s ubj ect i ve i nqui r y . See U ni t ed St at es v. B ert ol i , 40 F. 3d 1384, 1412 ( 3d C i r . 1994) ( “‘ T he j udge does nothave t o be s ubj ect i vel ybi as ed orpr ej udi ced, s o l ong as he appe ar s t o be s o. ’ ”) ( quot i ng L i t eky , 510 U
. S. at553 n. 2) ; A l exande rv. Pr i m er i ca H ol di ngs , I nc. , 10 F. 3d 155, 162 ( 3d C i r . 1993) ( “‘ [T]he publ i c' s confi dence i n the j udi ci ary , w hi ch maybe i r r epar abl yharm ed i f a c as e i s al l ow ed t o pr ocee d befor e a j udge w ho appea r s t o be t ai nt ed’ , r equi r es that‘ j us t i ce musts at i s fythe appea r ance of j us t i ce. ’ ”) ( quot i ng I n r e Sch. A s bes t os L i t i g. , 977 F. 2d 764, 776 ( 3d C i r . 1992) )
. T her efor e, “i f a ‘ r eas onabl e man, w e re h e to k n o w a ll th e c irc u m sta n c e s, w o u ld h a rb o r d o u b ts aboutthe j udge’ s i m part i al i ty ’ underthe appl i cabl e s t andar d, then the j udge mustr ecus e. ” U ni t ed St at es v. A nt ar , 53 F. 3d 568,W e not e as w el l that the D i s tr i ctC our tw as bes i eged by 37 op po si ng group s of l aw y ers w ho fl oo ded i tw i th n umer ou s m oti on s, a rg u m e n ts, a n d c o u n ter -a rg u m e n ts, w h ich u n d o u b ted lym a d e it diffi cultfor the C ou rtt o en gag e i n the r efl ect i on need ed to exerci se i t s fi duci arydutyt o as s ur e thatthe s ett l ementpr oces s w as pr ocedur al l yfai r . W e have s een w i th d is m aythats om e, i f not m any , of the at t orney s on b oth si des of w hat has becom e t he clas s act i on i ndus tr yhave, “i n der ogat i on of thei r p rof es s i onal and fi duci aryobl i gat i ons , pl ace d thei rpecuni arys el f- i nt er es tahea d of thatof the cl as s . ” R eynol ds , 288 F. 3d at 279. W e bel i eve i t i s the re sp o n sib ili ty o f c o u n se l, c o n sis ten t w ith th e ir o b lig a tio n s to th e ir cl i ent s , t o as s i s tthe di s tr i ctcourt s i n thei rd ifficu ltt as ks of m anagi ng oft en unw i el di ng cl as s ac ti ons byel i m i nat i ng unnece s s arym ot i ons , exer ci s i ng r es tr ai nt i n fi l i ng obj ect i ons , and tr eat i ng oppos i ng couns el w i th the ci vi l i tythats houl d char act er i ze at t orneyrel at i on s. 72 5 7 4 (3 d C ir. 1 9 9 5 ) (q u o tin g In re L a rso n , 4 3 F .3 d 4 1 0 , 4 1 5 (8 th C ir
. 1 9 9 4 )). A p p ell an ts m ak e n o all eg ati o n that the D istri ct C o u rt d e riv e d its a lleg e d b ias f ro m a n e x tra

ju d icia l so u rc e ; ra th e r a ll i nci dent s ci t ed i n A ppel l ant s ’ m ot i on r efe rt o rul i ngs or s t at ement s m ade bythe D i s tr i ctC our tdur i ng the cour s e of the pr ocee di ngs . W e fi nd that , notw i ths t andi ng ourrul i ng thatthe D istric t C o u rt a b u se d its d isc re tio n in v a rio u s a sp e c ts o f its m anage m entof thi s cl as s act i on, A ppel l ant s have not demonstr at ed thatthe C our texer ci s ed “s uch a hi gh degr ee of f a v o ri tis m o r a n ta g o n is m a s to m a k e f a irju d g m e n t im p o s s ib le .” L i t eky , 51 0 U
. S
. at55 5. W e w i l l therefore den yA pp el l ants ’ peti t i on for a w ri tof m and am us. 37 I V . CO NC L US I ON F or the reasons setforth ab ov e, w e w i l l rem and the case to th e D istric t C o u rt f

o r f u rth e r p ro c e e d in g s c o n sis ten t w ith th is opi ni on.

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