Opinion ID: 755571
Heading Depth: 3
Heading Rank: 1

Heading: The Alleged Expansion of the Class

Text: According to Krell, the class definition was at the last minute expanded to release nearly 8 million additional policyholders not included in the class pled only 3 days earlier. Krell Brief at 4. 80 In addition to the previously-noted ramifications of this expansion with respect to the Rule 23 certification prerequisites, Krell also contends the release of these claims is improper because it exceeds the scope of the class complaint. Prudential and Lead Counsel counter that the certified class is actually smaller than the putative class defined in plaintiffs' initial pleadings and that the Task Force remediation plan also included an other claims category. As Lead Counsel explains, plaintiffs have contended from the outset that Prudential's common course of deceptive conduct extended beyond the churning, vanishing premium, and investment sales tactics and permeated its product design, agent training and oversight, sales activities, and dividend, expense and investment practices. Lead Counsel Brief at 20. The settling parties maintain that, even if such claims were not included in the Second Amended Consolidated Complaint, those claims could still be released because they arose from the conduct alleged in the Complaint. The district court held the release was not unfairly broad, finding it generally corresponded with the allegations in the Second Amended Consolidated Complaint. The court also found that releases may include all claims, including unpleaded claims that arise out of the same conduct alleged in the case. 81 Fairness Opinion, 962 F.Supp. at 558 (citing Grimes v. Vitalink Communications Corp., 17 F.3d 1553, 1563 (3d Cir.), cert. denied, 513 U.S. 986, 115 S.Ct. 480, 130 L.Ed.2d 393 (1994); Sandler Assocs., L.P. v. Bellsouth Corp., 818 F.Supp. 695, 704-05 (D.Del.1993), aff'd, 26 F.3d 123 (3d Cir.1994)). The crux of the plaintiffs' complaint was that Prudential engaged in a common scheme of deceptive sales practices. Although the Second Amended Consolidated Complaint specifically lists three types of deceptive sales claims--the churning, vanishing premium and investment plan claims--other allegations address conduct which supports the common scheme theory and which does not fall neatly within the three enumerated categories. See supra note 11. Therefore, we agree with the district court the other claims were properly released. 82 While it is essential to protect the interests of absentee class members, we believe the claims of the absentees here are adequately incorporated in the terms of the settlement. The category of other claims are part and parcel of the common scheme which underlies plaintiffs' entire case, and are separately addressed in the procedural guidelines which forms the basis for the ADR process. Finally, the settling parties have represented that the settlement does not release unknown claims relating to the servicing or administration of class members' policies, but is limited to claims relating to the actual sale of insurance policies. 83 Lead Counsel Brief at 62-63. Consequently, we believe the other claims were appropriately included in the release.