Title: Hollis & Wright, P.C., et al. v. Vivian Gadson et al.
Citation: N/A
Docket Number: 1051666
State: Alabama
Issuer: Alabama Supreme Court
Date: December 21, 2007

Rel 12/21/2007
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter.  Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334)
229-0649), of any typographical or other errors, in order that corrections may be made
before the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
 OCTOBER TERM, 2007-2008
_________________________
1051666
_________________________
Ex parte Hollis & Wright, P.C., et al.
PETITION FOR WRIT OF MANDAMUS
(In re: Vivian Gadson et al.
v.
United Wisconsin Life Insurance Company et al.)
(Montgomery Circuit Court, CV-02-1601)
COBB, Chief Justice.
This class action has previously been before this Court
in an appeal filed by the intervenors/objectors, who objected
to the settlement reached between the class plaintiffs and the
1051666
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insurance-company defendants.  King v. Gadson (No. 1040260,
Aug. 12, 2005), 946 So. 2d 540 (Ala. 2005)(table).  The
petitioners here include Hollis & Wright, P.C., L. Andrew
Hollis, Jr., Steven W. Couch, Roy Barnes, and The Barnes Law
Group, the lawyers and law firms who represented five
policyholders who were members of the class and who intervened
in the Gadson case, and Jay Shreenath, a member of the class
in Gadson.  The respondents here are the defendants that
agreed to the settlement in the Gadson case, including, among
others, American Medical Security, Inc., and United Wisconsin
Life Insurance Company.  Because the petition for the writ of
mandamus challenges a permanent injunction, this Court will
treat the petition as a timely filed appeal under Rule
4(a)(1), Ala.R.App.P.
In the case resulting in the appeal in Gadson, the
intervenors objected to the settlement reached between counsel
for the class and counsel for the defendant insurance
companies.  They claimed the named plaintiff did not have
standing, that notice to the class was defective, and that the
settlement reached was unfair.  They asserted these arguments
to the trial court; it rejected them and entered its final
1051666
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judgment on September 20, 2004, approving the settlement.
That judgment provided, among other things, that members of
the settlement class forever released their claims against the
defendants and were permanently enjoined from pursuing the
released claims. The intervenors appealed to this Court,
which, after hearing oral argument, unanimously affirmed the
judgment of the trial court, without an opinion.  
In July  2006, Jay Shreenath, represented by the other
appellants here, filed a motion to intervene as a class
representative in a case pending in the Superior Court of Cobb
County, Georgia, Parker v. American Medical Security, Inc.
(No. 04-01-1980). He sought to assert in the Georgia class
action claims that had been addressed and settled in the class
action in Gadson, supra.  The appellees subsequently sought an
order from the Montgomery Circuit Court to enforce the
settlement in the Gadson case and to enjoin further litigation
on the issues addressed in the settlement.  The Montgomery
Circuit Court conducted a hearing and determined that
Shreenath had received proper notice of the proposed
settlement, that he had not opted out of the class or
otherwise objected to the settlement, and that he was
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therefore bound by the terms of the settlement.  Accordingly,
the court entered an order stating, in pertinent part:
"Despite this court's 
approval 
of 
the 
settlement
and the subsequent approval by the Supreme Court of
Alabama, the finality of the Order of Final Approval
and Judgment has been repeatedly attacked by the
plaintiffs' attorneys in the Parker case [the
appellants 
here]. 
 
In 
addition, 
the 
Parker
plaintiffs sought an injunction in Georgia to block
the settlement of this case.  The Supreme Court of
Georgia 
rejected 
the 
imposition 
of 
any 
such
injunction.  See American Medical Security, Inc. v.
Parker, 279 Ga. 201, 612 S.E.2d 261 (2005).  Since
that time, despite the injunction entered by this
Court and the rulings of no fewer than three Supreme
Courts, counsel for plaintiffs in the Parker case
continue to attack the settlement.
"Counsel for plaintiffs in the Parker case
[i.e., the appellants here] subjected themselves to
the jurisdiction of this Court by appearing to
oppose the settlement. [The appellants] subjected
themselves to the jurisdiction of the Alabama courts
by appearing in the Alabama Supreme Court to oppose
the settlement of the instant case.
"On July 11, 2006, Shreenath intervened as a
purported class representative in the Parker case,
asserting claims that were unquestionably settled
and dismissed by the Gadson settlement.  Shreenath
is a Georgia resident who was a MedOne policyholder
from 2000-2003. The uncontroverted evidence before
the Court establishes that individual notice in the
form of the 'Notice of Class Action and Proposed
Settlement,' along with an 'Exclusion Request,' was
mailed to Shreenath ... in compliance with this
court's Order Approving Class Notice dated April 6,
2006.  There is no evidence that the notice was
returned as undeliverable. Further, notice was
published in the Atlanta Journal-Constitution [a
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daily newspaper].  Shreenath did not submit an
exclusion request, file any objection to the class
or otherwise opt out of the Gadson settlement.
Consequently, Shreenath is a member of the Gadson
settlement class.  Caselaw is clear that by virtue
of Shreenath's status as a Gadson class member, he
is precluded from participating in the Parker case
or any other litigation involving his MedOne policy
with Defendants.
"THE COURT HEREBY ORDERS, FINDS, CONCLUDES,
ADJUDGES AND DECREES AS FOLLOWS:
"Jay Shreenath is a member of the Gadson class
of plaintiffs because he is a Georgia resident who
was a MedOne certificate holder from 2000-2003.
Shreenath never opted out, and never objected to the
settlement. Because he is a member of the Gadson
settlement class, it is hereby ordered that Jay
Shreenath, as well as all other Gadson class
members, 
are 
fully 
and 
forever 
barred 
and
permanently 
enjoined 
from 
asserting 
either
individually, representatively, or on behalf of any
class or person, or in any other capacity, any and
all Released Claims against any and all of the
Released Parties as memorialized in this Court's
Final Approval and Final Judgment dated September
29, 2004.
"It is further ordered that [the appellants] and
any attorney and/or law firm acting in concert
therewith 
are 
fully 
and 
forever 
barred 
and
permanently 
enjoined 
from 
asserting, 
filing,
prosecuting, intervening in, and litigating any
cause of action, or otherwise taking steps, to
pursue the settled and Released Claims against any
and all Released Parties.  Specifically, Steve
Couch, Esq., Hollis & Wright, P.C., and any attorney
and/or law firm acting in concert therewith are
fully and forever barred and permanently enjoined
from litigating and asserting any and all Released
Claims against any and all Released Parties on
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behalf of Jay Shreenath or any other Gadson class
member in the case of Parker, et al. v. American
Medical Security, Inc., et al., filed in the
Superior Court of Cobb County, Georgia, Civil Action
File No. 04-01-1980 or in any other case that
asserts causes of action related to the Released
Claims and Released Parties.
"This Order is not applicable to persons who are
not part of the Gadson class or who opted out of the
Gadson settlement, nor does this order attempt to
enjoin or otherwise preclude Steve Couch, Esq.,
Hollis & Wright, P.C., or any attorney or law firm
from filing, prosecuting, or litigating any claims
or cause of action on behalf of persons who are not
part of the Gadson class or who opted out of the
Gadson settlement."
The appellants subsequently petitioned for a writ of
mandamus from this Court challenging the Montgomery Circuit
Court's order.  On December 14, 2006, this Court entered an
order stating that it would treat the petition as a timely
filed appeal pursuant to Rule 4(a)(1), Ala.R.App.P. The
appellants assert that the effect of the trial court's order
in this class action is to unlawfully predetermine the res
judicata effect of its judgment in Gadson on Shreenath's
participation in the Parker class action.  The appellants
argue that in Taylor v. Liberty National Life Insurance Co.,
462 So. 2d 907, 910 (Ala. 1984), this Court recognized that
such an action would be error:
1051666
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"Under the settled law applicable to these
circumstances, there is no question that this Court
is empowered to review a judgment collaterally
attacked on due process grounds.  See, generally, 3
Newberg on Class Actions, § 2755b (1977); Note,
Collateral Attack on the Binding Effect of Class
Action Judgments, 87 Harv. L. Rev. 889 (1974).
Indeed, the Federal Rules Advisory Committee itself
states that 'the court conducting the [class action]
cannot predetermine the 'res judicata' effect of the
judgment; this can only be tested in a subsequent
action.'  Fed. R. Civ. P. 23, Advisory Committee's
Note, 39 F.R.D. 98, 106 (1966)."
However, there has been no predetermination of the res
judicata effect of the judgment in Gadson, where the trial
court has enforced its final order of settlement of a class
action by enjoining a class member in the settled class action
from further proceedings in a different court seeking to
relitigate the matters adjudicated in the action that has been
settled.  See Thompson v. Edward D. Jones & Co., 992 F.2d 187,
189-90 (8th Cir. 1993):
"Contrary 
to 
appellant's 
assertions, 
the
district court [in an Arkansas federal court action
('the Arkansas action')] did not violate the
principle that 'a court adjudicating a dispute may
not be able to predetermine the res judicata effect
of its own judgment....'  (Phillips Petroleum Co. v.
Shutts, 472 U.S. 797, 806, 105 S. Ct. 2965, 2971, 86
L. Ed. 2d 628 (1985) (emphasis added)) by enforcing
the Final Judgment of Dismissal and Order in the
Arkansas action against appellant.  That principle
is inapposite to subsequent actions for enforcement
of a court's previously-issued order.  The thrust of
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the doctrine is that the res judicata effect of a
judgment can only be determined in a subsequent
proceeding insofar as the elements of res judicata
in the class action context (compliance with Federal
Rule of Civil Procedure 23 and due process--see 3
Herbert B. Newberg, Newberg on Class Actions §§
16.21 and 16.24 (3rd ed. 1992)) can, logically, be
raised only after the first proceeding has concluded
and judgment has been entered.  Therefore, upon
determining that the second proceeding was barred by
the terms of the Final Judgment in the Arkansas
action, 
the 
district 
court 
acted 
within 
its
authority to enjoin appellant pursuant to those
terms."
(Some emphasis added; some emphasis original.) (Footnote
omitted.)  We approve of the rationale of Thompson as applied
to the circumstances of this case, and we conclude that the
Montgomery 
Circuit 
Court's 
determination 
that 
it 
had
jurisdiction over the appellants in this case is properly
supported.  Accordingly, the judgment of that court is due to
be affirmed.
AFFIRMED.
See, Lyons, Woodall, Stuart, Smith, Bolin, and Parker,
JJ., concur.  
Murdock, J., concurs in the result.