Opinion ID: 217533
Heading Depth: 3
Heading Rank: 2

Heading: District Court's Award of Relief in Permanent Injunction and Final Judgment

Text: CUNA next appeals the District Court's September 21, 2009 Permanent Injunction and Final Judgment. [13] We review a District Court's decision to grant a permanent injunction under an abuse of discretion standard. Citizens Fin. Group, Inc. v. Citizens Nat'l Bank of Evans City, 383 F.3d 110, 126 (3d Cir. 2004). An abuse of discretion exists where the District Court's decision rests upon a clearly erroneous finding of fact, and errant conclusion of law, or an improper application of law to fact. A.C.L.U. of New Jersey v. Black Horse Pike Reg'l Bd. of Educ., 84 F.3d 1471, 1476 (3d Cir.1996) (citation and internal quotation marks omitted). [W]e will not interfere with the district court's exercise of discretion unless there is a definite and firm conviction that the court ... committed a clear error of judgment in the conclusion it reached upon a weighing of the relevant factors. Morgan v. Perry, 142 F.3d 670, 683 (3d Cir. 1998) (citing Hanover Potato Products, Inc. v. Shalala, 989 F.2d 123, 127 (3d Cir.1993) (internal quotation marks omitted)). CUNA claims that the District Court abused its discretion because the Permanent Injunction awarded impermissibly broad relief on behalf of the former class members. Specifically, CUNA asserts that the District Court's injunction improperly imposed restrictions on CUNA in its claims process for policyholders and improperly retained jurisdiction over claims process issues even after the District Court had decertified the class. CUNA further argues that the District Court, after decertifying the class, should have let the former class members pursue individual breach of contract claims, rather than enjoining CUNA from construing the policy definition differently and allowing former class members to pursue their disability benefits through the claims process. [14] Meyer responds that the District Court still had jurisdiction over the claims of the entire class at the time that it ordered injunctive relief for the class because it decertified the class immediately after. Additionally, Meyer asserts that following the District Court's Final Judgment, no individual issues remained to be resolved because in Meyer's view, the District Court essentially ordered specific performance of the CUNA contract regarding each of the class members. District courts are afforded considerable discretion in framing injunctions. Ameron, Inc. v. U.S. Army Corps of Engineers, 787 F.2d 875, 887-90, adopted in part on reh'g by, 809 F.2d 979 (3d Cir. 1986), cert. granted, 485 U.S. 958, 108 S.Ct. 1218, 99 L.Ed.2d 419 (1988), cert. dismissed, 488 U.S. 918, 109 S.Ct. 297, 102 L.Ed.2d 264 (1988) (citing Lemon v. Kurtzman, 411 U.S. 192, 200, 93 S.Ct. 1463, 36 L.Ed.2d 151 (1973)). Nevertheless, injunctive relief should be no broader than necessary to provide full relief to the aggrieved party. Ameron, 787 F.2d at 888 (citing Califano v. Yamasaki, 442 U.S. 682, 702, 99 S.Ct. 2545, 61 L.Ed.2d 176 (1979)); see Madsen v. Women's Health Ctr., Inc., 512 U.S. 753, 765, 114 S.Ct. 2516, 129 L.Ed.2d 593 (1994) (noting that an injunction should be no broader than necessary to achieve its desired goals). In its Permanent Injunction, the District Court ordered CUNA to follow certain procedures to process the claims forms, including processing the forms in accordance with the District Court's guidelines and using only the Court's interpretation of Total Disability. Additionally, the District Court's Permanent Injunction provided that if a claimant opposed the outcome of CUNA's determination, he could file a motion for contempt with the District Court, which, after giving CUNA the opportunity to respond, would then review CUNA's denial of the claim for benefits. If the District Court determined that CUNA improperly denied benefits, it would award prejudgment interest to the claimant from the date of denial. The District Court reserved for itself jurisdiction over the entire claims process, noting that it retain[ed] jurisdiction of all matters relating to the interpretation, administration, implementation, effectuation and enforcement of this Injunction and this Final Judgment. (App. at 6.) The procedural posture here is seemingly unique and is the source of our concern. [15] We believe the District Court abused its discretion in issuing an injunction in which it retained jurisdiction over the class members' claims throughout the claims procedure process after the class was decertified. We are guided by the principle that [i]n the absence of a certified class action, [a plaintiff] [i]s only entitled to relief for itself [16] Ameron, 787 F.2d at 888 (citing Nat'l Ctr. for Immigrants Rights v. INS, 743 F.2d 1365, 1371-72 (9th Cir.1984); Davis v. Romney, 490 F.2d 1360, 1366 (3d Cir.1974)). Additionally, in the context of an opt-in class, where the district court denied class certification for an action under the Fair Labor Standards Act, we have held that [a] court which rejects a class as improper has no power to bind class members not properly before it. Lusardi v. Lechner, 855 F.2d 1062, 1079 (3d Cir.1988). In Lusardi, the district court held that the timely filing of individual charges in an age discrimination lawsuit was necessary to the maintenance of individual actions by opt-in class members at a point in time when the class was not certified. We found that [t]he power to judge the merits of their individual claims lies with the forum in which those claims are presented... [a] district court has no power or jurisdiction to rule on the merits of the claims of individual members of a putative opt-in class when it denies class certification. This is clear legal error. Id. Others circuits have also found injunctions to be overbroad where their relief amounted to class-wide relief and no class was certified. See, e.g., Sharpe v. Cureton, 319 F.3d 259 (6th Cir.2003) (While district courts are not categorically prohibited from granting injunctive relief benefitting an entire class in an individual suit, such broad relief is rarely justified because injunctive relief should be no more burdensome to the defendant than necessary to provide complete relief to the plaintiffs.) (alteration in original) (citing Yamasaki, 442 U.S. at 702, 99 S.Ct. 2545); see also Culver v. City of Milwaukee, 277 F.3d 908 (7th Cir.2002) (suit became an individual action when the class was decertified); Cf. Brown v. Trs. of Boston Univ., 891 F.2d 337, 361 (1st Cir.1989) (An injunction should be narrowly tailored to give only the relief to which plaintiffs are entitled. Ordinarily, classwide relief, such as the injunction here which prohibits sex discrimination against the class of Boston University faculty, is appropriate only where there is a properly certified class.... But there is no such reason here for an injunction running to the benefit of nonparties.) (citations omitted). Through its Permanent Injunction, the District Court put in place a process by which class members would be required to present their claims to CUNA, and CUNA would be required to process those claims applying the Court's interpretation of Total Disability. The injunction also required implementing particular burdens of proof on the claimants, and providing claimants recourse to the same District Court judge in the event that they were not satisfied with the outcome of the claims process, which may result in an award of prejudgment interest. This relief was obviously not limited to Meyer, the only party plaintiff to the suit once the class was decertified. Although the District Court entered the Permanent Injunction and Final Judgment before decertifying the class on the docket, [17] at the point that the class was decertified, [18] the relief was overly broad. Once decertification became effective, the District Court had no jurisdiction over any of the claims of the putative class members and therefore no ability to order that any relief be granted to any claimant other than Meyer. Here, the claims process set forth and the District Court's assertion of jurisdiction effectively allowed the Court to retain jurisdiction over the claims of former class members despite decertification. In other words, the relief granted in the Permanent Injunction was no longer narrowly tailored. We find that the District Court abused its discretion in awarding overly broad injunctive relief. Even if the District Court had ruled on Meyer's claim, the relief in the form of the injunction would have been overly broad. We will vacate the Permanent Injunction and Final Judgment and remand to the District Court for further action consistent with this opinion.