Opinion ID: 3014163
Heading Depth: 1
Heading Rank: 1

Heading: assorted injuries. In December of 1997,

Text: the Judicial Panel for Multidistrict
Litigation transferred all the federal The history of this litigation was actions to Judge Louis Bechtle in the previously detailed in our opinion in Diet United States District Court for the Eastern Drugs I, 282 F.3d at 225-29. The cases District of Pennsylvania, creating marshaled before the District Court arose Multidistrict Litigation 1203 (“MDL from the marketing of two appetite 1203”).2 suppressants, fenfluramine (sold as In April of 1999, Wyeth began “Pondimin”) and dexfenfluramine (sold as “global” settlement talks with plaintiffs in “Redux”). Appellee American Home the federal action together with several Products 1 removed the drugs from the plaintiffs in similar state class actions. market in September of 1997, after data The parties reached a tentative settlement came to light suggesting a link between agreement for a nationwide class in use of the drugs and valvular heart damage November of 1999. Soon thereafter, on (“VHD”) and after the United States Food November 23, 1999, the District Court and Drug Administration (“FDA”) issued conditionally certified a nationwide a public health advisory alert. By that settlement class and, concurrently, time, four million people had taken preliminarily approved the settlement. Pondimin over the previous two years, and two million people had taken Redux. The Court scheduled a fairness hearing for May 1, 2000 on class 1 American Home Products changed 2 its name to Wyeth in March of 2002. We Judge Bechtle has since retired, use the name Wyeth for the remainder of and Judge Harvey Bartle, III, now presides the opinion. over MDL 1203. 6 certification and final settlement approval. members who are medically and otherwise On August 28, 2000, the District Court eligible opportunities to opt out at a later entered a final order certifying the class time, at an intermediate stage.4 Those who and approving the settlement. choose to opt out at an intermediate stage receive no compensation but are permitted to pursue most of their “settled claims” B. individually, subject to certain restrictions. The settlement agreement provides, in The settlement agreement embraces relevant part: all persons who took Pondimin or Redux. Wyeth undertook to pay up to $3.75 billion [Intermediate opt-outs] may (present value) to fund benefits to n o t s e e k p u n i t iv e , members of the class. Settling class exemplary, or any multiple members agreed in return to release W yeth damages against [Wyeth and from all claims arising out of their other released parties]; . . . . ingestion of the drugs, other than claims [Intermediate opt-outs] may based on PPH brought by individuals who not use any pre vious met certain medical criteria. verdicts o r j ud g m ents against [Wyeth], or factual The agreement was crafted to avoid findings necessary to such an all-or-nothing choice at the threshold. verdicts or judgments, for Rather, several opt-out points were purposes of establishing envisioned at various places along the claims or facts in order to continuum of the settlement period. obtain a verdict or judgment Putative class members who wished to opt . . . . Nor may [an out entirely from the settlement, foregoing intermediate opt-out] . . . all benefits and any restrictions, were seek to introduce into obliged to file their opt-out notices by evidence against [Wyeth], March 30, 2000. Drug users who chose for any purpose, such a not to opt out initially became settlement verdict, judgment or factual class members, bound not to assert “settled finding. claims” against Wyeth except as the agreement permits.3 Joint App. 616-17. The agreement allows class In return for intermediate opt-outs’ 3 4 “Settled claims” generally Some class members who did not included all conceivable claims arising out exercise an intermediate opt-out reserved of purchase and use of the diet drugs but a so-called “back-end” opt-out right. specifically excluded, among other things, Back-end opt-out rights are not at issue in claims based on PPH. this appeal. 7 acceptance of the limitation on punitive her physician in 2002, alleging claims of and multiple damages, Wyeth agreed not negligence, products liability, improper to assert any statute of limitations, laches, warnings, and fraud. Clark’s final or claims-splitting defenses against amended petition seeks recovery of allowed individual claims. compensa tory da ma ge s, inc luding damages for pain, disfigurement, mental In approving the settlement, the anguish, and medical expenses. Likewise, District Court expressly relied in part on Smart’s petition alleges claims against the finding that “class members had an Wyeth and her physician for actual opportunity to preserve their punitive damages for pain, disfigurement, anguish, damages claims by exercising the initial and medical expenses arising from state opt out.” In re Diet Drugs Prods. Liab. tort claims of negligence, failure to warn, Litig., No. 99-20593, 2000 WL 1222042, and design defect. at  n.22 (E.D. Pa. Aug. 28, 2000) (“Memorandum and Pretrial Order No. Meanwhile, in state court in 1415,” hereinafter “PTO 1415”). The Mississippi, class member Lonelle James, District Court also observed that the and others, also filed claims against Wyeth waiver of punitive damages was not an after exercising their intermediate opt-out inappropriate “trade-off,” since “punitive rights. James was selected as the first trial damage claims are often illusory” and plaintiff. Her claims were based on state subject to judicial limitation or reduction law theories of negligence, strict liability as a matter of fairness to the defendant. Id. for design and m arketing defect, In addition, the District Court expressly inadequate and improper warnings, retained jurisdiction to “enforce the misrepresentation, and breach of implied Settlement in accordance with its terms; warranty. James sought compensatory . . . and to enter such other and further damages—including damages for pain and orders as are needed to effectuate the terms m e n t a l a n g u i s h , l o s t e a r n i n g s, of the Settlement.” Id. at . disfigurement, physical impairment, medical expenses, and loss of enjoyment This Court affirmed PTO 1415 of life—from both Wyeth and her without opinion. In re Diet Drugs Prods. physician. Liab. Litig., 275 F.3d 34 (3d Cir. 2001). Plaintiffs’ state court claims were C. pleaded in terms that appeared to abide by A number of class members who the terms of the settlement preclusion of did not exercise their initial opt-out rights punitive and multiple damages. But the elected to opt out at the intermediate stage. actual conduct of the litigation raised Plaintiffs Clara Clark and Linda Smart, justifiable fear in the District Court, and both represented by the Texas law firm of among the counsel for defendant and the Fleming & Associates, filed lawsuits in class, that the plaintiffs were seeking to Texas state court. Clark sued Wyeth and obtain through the back door what they 8 were barred from receiving through the any medical condition of front. Reviewing the state court plaintiff caused by Wyeth submissions by Clark’s counsel, the other than mitral valve District Court found—and this is regurgitation [VHD ] or undisputed— that Clark’s case summary pulmon ary hyperten sion was “replete with statements leading secondary to mitral valve ineluctably to the conclusion that such regurgitation. punitive damages are being sought, even Id. at ¶¶ 2-3. though not by that name.” In re Diet Drugs Prods. Liab. Litig., No. 99-20593, Soon thereafter counsel Fleming’s Memorandum and Pretrial Order No. other client, Linda Smart, found her state 2625, at 2 (E.D. Pa. filed October 16, court case brought to the attention of the 2002) (hereinafter “PTO 2625”). Clark’s District Court. The District Court noted case summary expressed the intent to offer that Fleming was obviously aware of the evidence concerning “‘tens of thousands ruling in the Clark litigation, but of people [who] were injured’”; Wyeth’s nevertheless had submitted a proposed jury guilt of “‘corporate avarice’”; and its charge containing inflammatory language alleged “‘goal of increasing profits at the and references to destruction of evidence expense of human life.’” Id. at 2-3. Worse and a cover up. The District Court yet, another submission (in a perhaps rejected the contention that this evidence Freudian slip) averred that, among other was admissible on issues properly before things, “‘[p]laintiff seeks punitive the state trial court and concluded that damages.’” Id. at 4. Before the District to allow a class member to Court, Clark’s counsel disavowed that introduce into evidence or to claim as an error. The District Court argue the elements of a concluded, however, that Clark’s counsel punitive damage claim on was seeking to “circumvent” the punitive the condition that he or she damages bar and enjoined him from: does not specifically request introducing any evidence or punitive damages by name. making any statement . . . would create a giant before or argument to the loophole. court or jury related directly In re Diet Drugs Prods. Liab. Litig., No. or indirectly to (a) punitive, 99-20953, Memorandum and Pretrial exem plary or multiple Order No. 2680, at 7 (E.D. Pa. filed damages, however December 11, 2002) (hereinafter “PTO d e s c r ib e d ; and (b ) 2680”). Consequently, the Court issued an malicious, wanton or other injunction similar to that in the Clark case. similar conduct of Wyeth, however described; . . . [or] Only a few weeks later, Wyeth 9 returned to District Court once again to that he will not introduce at address Clark. Reviewing Clark’s the trial any reference to amended trial exhibit list, the District Wyeth’s size, financial Court observed that it demonstrated condition, or worth. He “counsel’s motive to infect the trial with must also include as part of improper bad conduct evidence concerning his statement his trial Wyeth.” In re Diet Drugs Prods. Liab. exhibits, witness list, and Litig., No. 99-20593, Memorandum and points for charge . . . . Pretrial Order No. 2717 at 3 (E.D. Pa. filed Id. at ¶ 2. January 29, 2003) (hereinafter “PTO 2717”). At the same time—and Back in Texas, the trial judge in the significantly—the District Court quoted Clark case held an extensive pretrial the state trial judge, who expressed his conference. On February 5, 2003, State commitment to assure “‘a fair verdict that District Judge Dennis Powell issued an is an approximation of the damages and extensive thirteen-page pretrial order. not a result of them [the jury] being Judge Powell’s carefully reasoned and incensed.’” Id. at 4. The District Court written opinion exhibited understanding of concluded that counsel Fleming had the effect of the settlement preclusion and merely withdrawn certain submissions and a determination to honor it. The State substituted others in an effort to District Judge perceptively observed that circumvent the prior injunctions. “not surprisingly, the plaintiff wants to try the case in a manner that will maximize The District Court held Fleming in the chances of a significant recovery, and, civil contempt and issued an order, PTO not surprisingly, the defendant wants to try 2717, enjoining Clark and her counsel the case in a manner that will minimize the from commencing the state trial until chances of a significant recovery.” Joint Fleming submitted, and the Court App. 1281. Accordingly, the state court approved, a statement under oath that he flatly prohibited evidence relevant only to would obey PTO 2625. The order punitive or exemplary damages and provided: evidence relevant to other issues but That statement must declare unduly prejudicial or misleading. At the