Opinion ID: 1446322
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: This case began on July 27, 2001 with a class action complaint alleging various federal securities laws violations by employees of Qwest. Aplt. App. at 41. Several other complaints were subsequently filed, and the operative complaint is Plaintiffs' fifth amended complaint filed on February 6, 2004 which includes fourteen former Qwest employees and Arthur Andersen accountants as defendants (Arthur Anderson LLP joins Qwest's brief and contributed to the settlement). Id. at 87, 179-385; Aplt. Br. at 4; Aplee. Br. at 2 n. 1. After difficult and arms' length negotiations with mediators, Aplt.App. at 710, Qwest and eleven of its officers came to a settlement agreement with the Plaintiff class, and Plaintiffs filed an unopposed motion for preliminary approval of a stipulation for partial settlement on November 23, 2005. Id. at 153, 1057-1109; Pl. Br. at 3-4. Mr. Nacchio and Mr. Woodruff were not included in the settlement negotiations but were informed that they would be included if they would pay personally into any settlement fund. Aplt.App. at 880-81. Plaintiffs believed that Mr. Nacchio and Mr. Woodruff were especially culpable and should not be allowed to join a settlement in which only Qwest would pay. Id. Mr. Nacchio and Mr. Woodruff were not so inclined and therefore were not included in the final settlement. Id. at 881. Both Mr. Nacchio and Mr. Woodruff have agreements with Qwest that require Qwest to indemnify them for any reasonable amounts they might pay in settlement of a lawsuit against them as former directors or officers. Id. at 554, 655-56.; Aplt. Br. at 7. The settlement includes three provisions that are at issue in this appeal. Aplt. Br. at 7-8. The first, as required by Section 21D of the Private Securities Litigation Reform Act of 1995 (PSLRA), 15 U.S.C. § 78u-4, bars contribution claims between and among the Released Persons and Non-Settling Defendants (defined to include Mr. Nacchio and Mr. Woodruff) based on, relating to, or arising out of the Released Claims. Aplt.App. at 1009. This is the Reform Act Bar. [1] See id. The second states, in relevant part, that the Non-Settling Defendants. . . . are permanently barred, enjoined, and restrained from commencing, prosecuting, or asserting any claim, if any, however styled, whether for indemnification, contribution, or otherwise and whether arising under state, federal, or common law, against the Released Persons based on, arising out of, or relating to the Released Claims. Id. This is the Complete Bar. See id. at 1010. The third provision includes two separate provisions that are grouped and addressed together as the Contractual Provisions. Id. at 1010-11; Aplee Br. at 12. The first states that the Class will not settle any claim or judgment against a Non-Settling Defendant without obtaining from the Non-Settling Defendant the release of any and all claims the Non-Settling Defendant may have against any of the Released Persons based on, arising, out of, relating to, or in connection with the Released Claims or the subject matter thereof. Aplt.App. at 1011. The second orders that to the extent (but only to the extent) not covered by the Reform Act Bar Order and/or the Complete Bar Order, the Lead Plaintiffs, on behalf of themselves and the Class, further agree that they will reduce or credit any settlement or judgment (up to the amount of such settlement or judgment) they may obtain against a Non-Settling Defendant by an amount equal to the amount of any settlement or final, non-appealable judgment that a Non-Settling Defendant may obtain against any of the Released Persons based on, arising out of, relating to, or in connection with the Released Claims or the subject matter thereof. Id. at 1010. The district court preliminarily approved the partial settlement on January 5, 2006, id. at 156, and, after a motion by Plaintiffs and briefing by the parties, a hearing on final approval of the settlement was held on May 19, 2006. Aplt.App. at 934-94. Mr. Nacchio and Mr. Woodruff objected to the settlement on several grounds. Id. at 952-58. All parties were heard at this hearing. Id. at 934-94. On September 29, 2006, the district court entered its Partial Final Judgment and Order of Partial Dismissal with Prejudice (PFJ), overruling Mr. Nacchio and Mr. Woodruff's objections [b]ased on the reasons stated, arguments advanced, and authorities cited by Qwest in its reply. Id. at 173, 1004. The district court held that the settlement was fair, reasonable, and adequate to the extent Fed.R.Civ.P. 23(e)(1)(C) applies to Mr. Nacchio and Mr. Woodruff. Id. at 1005. The district court entered its final Judgment on October 2, 2006. Aplt.App. at 174, 1044. [2] Mr. Nacchio and Mr. Woodruff's appeal followed. Id. at 178, 1051.