Opinion ID: 3014823
Heading Depth: 3
Heading Rank: 1

Heading: Downstream Opt Outs

Text: As to the first group of Appellants, the downstream opt outs, it is clear that the issue of adequacy of representation was explicitly addressed by the District Court at the fairness hearing. See PTO 1415 Memorandum at 99-122. The District Court specifically considered Appellants’ arguments regarding intraclass conflicts. The District Court gave considerable treatment to the argument that this Settlement Agreement had problems analogous to those in 16 Amchem Products, Inc. v. Windsor, 521 U.S. 591 (1997). The District Court specifically found that there is no “futures” problem with this Settlement Agreement because, unlike in Amchem, where asbestos class members could not know of their exposure or disease, potential class members are aware of their exposure to diet drugs and any injuries from that exposure are detectable in medical tests – the injuries will not remain latent for 30 or 40 years. The District Court specifically found that the medical evidence overwhelmingly shows that the heart conditions caused by these diet drugs are detectable shortly after use of the drugs ceases and that there is no evidence that the conditions caused by these drugs are latent. See PTO 1415 Memorandum at 105 (discussing numerous medical studies). Further, the District Court also rejected the argument that this Settlement Agreement lacks the structural protections 17 that doomed the settlement agreement in Amchem. The District Court specifically found that this Settlement Agreement includes structural protections to protect class members with varying diagnoses, pointing to the ability of a particular class member to “step up” to higher compensation levels as their disease progresses. PTO 1415 Memorandum at 113-4. The District Court also considered the argument that class members who would exercise downstream opt out rights were subject to an improper trade-off during settlement negotiations. After considering the relevant case law, the District Court concluded: In sum, the court finds that Class Counsel’s agreement to waive punitive damage claims on intermediate and back end opt outs in exchange for protection against statute of limitations and claim splitting defenses represents 18 a fair and wholly appropriate trade-off. These provisions do not represent an improper allocation, nor do they affect the procedural fairness of the settlement. PTO 1415 Memorandum at 115. These Appellants argue that because the specific individuals who are Appellants in this case were not the specific individuals who raised objections at the fairness hearing, they must have the opportunity to litigate the issue themselves. This argument ignores the underpinnings of the class action mechanism. If this argument were to be accepted, each class member would be able to relitigate each issue, rendering the class action mechanism pointless. While it is true that the specific Appellants in this case did not, themselves, litigate this issue at the fairness hearing, other class members who are representative of them did litigate this issue and the District Court considered all of the arguments 19 and evidence in that regard. Appellants were represented by other class members at the fairness hearing and because the District Court decided that the class was adequately represented, the issue of adequate representation of Appellants has already been fairly litigated. Appellants also argue that this Court has not yet addressed the adequacy of representation because the appeal from the approval of the class settlement was voluntarily withdrawn due to settlement between Wyeth and the individual class members filing that appeal. There is no support for the proposition that because a party does not pursue an appeal of a District Court’s order, that order does not bind the class members or cannot be considered for its preclusive effect. See Orthopedic Bone Screw, 350 F.3d at 361 (noting that “appeal of class settlement was voluntarily dismissed, rendering the District Court’s order final and 20 unappealable.”) It is also worth noting that this Court has, in other appeals from this class settlement, addressed the adequacy of representation. See In re Diet Drugs, 282 F.3d 220, 231 (3d Cir. 2002) (“That various subclasses in the Brown class could find themselves in competition does not by itself establish an actual conflict undermining adequacy of representation”), In re Diet Drugs, 93 Fed. Appx. 338, 344 (3d Cir. 2004) (observing “[t]hat certain class members were differently situated with respect to filing deadlines should not be taken to mean that their overall interests diverged from that of the general class” and concluding that representation was adequate). This first group of Appellants, the downstream opt outs, were adequately represented at settlement and that same issue has already been raised and litigated. These Appellants 21 have been afforded the due process protections necessary for the Settlement Agreement to bind them. Therefore, these Appellants cannot now challenge the adequacy of their representation yet again by bringing this collateral attack.