Opinion ID: 3014496
Heading Depth: 1
Heading Rank: 1

Heading: the MDL case settlement. Upon

Text: In December 1999, Plaintiff- reconsideration, however, the Magistrate Appellant Metropolitan Life (“Metlife”) Judge reversed his Recommendation: settled an MDL federal class action (“the specifically, while Appellees may have MDL case”) with plaintiffs who had filed abused Metlife through overbroad actions over allegedly illegal sales discovery requests and allegations in practices. In the case before us, their complaint, they nonetheless had Appellees, all represented by the firm discrete individual claims, and thus it Behrend and Ernsberger (“Behrend”), are was up to the state courts to decide opt-out plaintiffs pursuing their own whether Appellees’ specific discovery individual suits in Pennsylvania state requests were relevant to those claims. courts against Metlife for allegedly The District Court adopted the Report improper sales practices. In those state and Recommendation in its entirety. court proceedings, Appellees1 have been II. allowed to conduct discovery of A. Metlife’s nationwide sales The Anti-Injunction Act dictates practices–including information that a federal court “may not grant an specifically related to litigants from the injunction to stay proceedings in a State MDL case–on the grounds that the sales court except as expressly authorized by practices are potentially relevant to Act of Congress, or where necessary in Appellees’ individual claims. In October aid of its jurisdiction, or to protect or 2001, Metlife approached the District effectuate its judgments.” 28 U.S.C. § Court for an injunction barring Appellees 2283. Thus, federal courts are statutorily from conducting such discovery, or from prohibited from enjoining state court proceedings except in three narrowly excepted categories of cases; the 1 Behrend’s opt-out clients are corresponding affirmative empowerment plaintiffs in the state court suits, but are to issue injunctions in these three defendants in this case; accordingly, to avoid categories of cases derives from the Allconfusion, we will refer to them as Writs Act, 28 U.S.C. § 1651(a). In re “Appellees.” -4- Prudential Ins. Co. of Am. Sales Practice any proceeding in state court “that is Litig., 261 F.3d 355, 365 (3 rd Cir. 2001) based on, relates to or involves facts and (hereinafter referred to as “Prudential I”). circumstances underlying the Released Metlife argues that the District Court had Transactions in the Class Action.” Id. at the authority to enjoin Appellees’ claims 363 (internal quotations omitted). Our because the instant case falls into either Court affirmed this injunction under the the second or third category of cases: Anti-Injunction and All-Writs Acts. Id. namely, the injunction is either 1) at 369-70. necessary in aid of the District Court’s Metlife argues that the instant jurisdiction over the MDL case, or 2) case is virtually identical to Prudential I, necessary to prevent relitigation of the as the injunctions sought and the statesettled claims in the MDL case. court complaints at issue are extremely Relying on Prudential I, Metlife similar in both cases. As the District contends that Appellees can be enjoined Court recognized, however, the crucial from making any claim or using any distinction between Prudential I and the evidence related to the claims settled in case before us is that the Lowes were the MDL case in order to keep the parties to the Prudential I settlement settlement from being disturbed. In because they did not opt out all of their Prudential I, the plaintiffs, the Lowes, claims. In contrast, Appellees did opt had four policies with Prudential that fell out all of their claims, and were therefore within the defined parameters of a not parties to the M DL case settlement. nationwide class action against Metlife tries to downplay the salience of Prudential that settled in October 1996 in this distinction, but a close reading of the District of New Jersey. Id. at 359-61. Prudential I makes it clear that the The Lowes chose to keep two policies Lowes’ participation in the settlement within the class action, but to opt out was the dispositive factor in the case. with the other two policies, meaning that Id. at 366 (“We must determine whether they would reap the benefits of the settlement of claims the Lowes had under settlement for two of their policies but the Class Policies precludes them from still retain the option to litigate the other pursuing claims in Florida purportedly two claims. Id. at 361. The Lowes’ arising from the [opted-out] Policies”), state-court complaint based on the opted- 367 (“the Lowes clearly released out policies contained numerous Prudential from any claims ‘based on,’ references to Prudential’s nationwide ‘connected with,’ ‘arising out of,’ ‘or policy, and the Lowes sought discovery related to, in whole or in part’ their two over those practices as relevant to the Class Policies”), 369 (“When the Lowes opted-out individual claims. Id. at 362- reviewed the Release and the Class 63. Prudential obtained an injunction Notice, they surely must have realized from the New Jersey District Court that, even though they could exclude enjoining the Lowes from undertaking certain policies from the settlement while -5- including others, doing so would Metlife observes that Appellees’ jeopardize their ability to prove claims complaint largely copies the class action relating to the [opted-out] Policies. The complaint in the MDL case and describes district court was not willing to release at length the allegations against Metlife them from their bargain; neither are in the MDL case. To the extent that we”). Appellees may try to bring in evidence of Metlife urges the Court to look nationwide practices that are irrelevant to beyond the specific facts of Prudential I their individual claims, however, Metlife and embrace a larger goal of protecting is free to object to such evidence before class action defendants from having to the appropriate state courts, who are the repeatedly defend against allegations proper authorities to make such relating to claims they have already evidentiary rulings. Allowing the settled. Metlife claims that the preemptive approach espoused by Prudential I court endorsed this larger Metlife here would essentially nullify goal when it cautioned that state suits Appellee’s decision to opt out: “To concerning the settled claim “could permit the settlement and release to vest number in the millions.” Id. at 367. We a right in Metlife that it can assert against believe, however, that Metlife takes this non-settling plaintiffs, and so to limit or comment out of context; the Prudential I restrict those plaintiffs in the prosecution court clearly confined that warning to the of state court suits, deprives them of the context of state-court plaintiffs who had benefit of having opted out.” App. at 34. already, like the Lowes and unlike In short, Metlife cannot point to Appellees here, already signed on to the any caselaw authorizing an injunction federal settlement. Id. (“allowing the against opt-out plaintiffs like Appellees, Lowes to prosecute their civil claims in who consciously and purposefully the Florida court would allow an end run refused to join a class action settlement. around the Class settlement by affording The cases Metlife points to in support of them (and other class members who its argument all deal with plaintiffs who might later attempt the same strategy) an are distinguishable from Appellees. See opportunity for relitigation of the generally In re The Prudential Ins. Co. of released claims”) (internal quotations Am. Sales Practices Litig., 314 F.3d 99 omitted) (emphasis added). (3 rd Cir. 2002) (class members who Metlife also asserts that the joined settlement tried to collaterally injunction somehow prevents Appellees attack settlement in state court); In re from relitigating the settled claims of the Diet Drugs, 282 F.3d 220 (3 rd Cir. 2002) class plaintiffs. Appellees, however, are (plaintiffs were trying to opt entire not relitigating the settled claims at all unnamed subclass out of nationwide here; they are suing over their own class action); Prudential I, 261 F.3d 355 alleged mistreatment at the hands of (enjoined plaintiffs were party to settled Metlife, not over someone else’s claim. class action); Carlough v. Amchem -6- Prod., Inc., 10 F.3d 189, 204 (3 rd Cir. in this court–even to the 1993) (enjoined plaintiffs had not yet extent of pleading been given the opportunity to opt out, so allegations not applicable state suit was premature).2 We therefore to the type of policy the uphold the denial of the injunction. individual plaintiff bought B. and is suing on. This, of Finally, we address Appellees’ course, exposes M etLife to contention that “the District Court erred discovery demands that, in refusing to reject the Magistrate while they may relate to Judge’s unsupported dictum stating that claims in the complaint, the opt-out litigants have committed cannot relate to the actual discovery and pleading ‘abuse’ in their case. Similarly, I believed state court cases.” Appellees’ Br. at ii. MetLife was the recipient Specifically, Appellees take issue with of unreasonably broad and the following language from the duplicative discovery Magistrate Judge’s report and requests in the state court recommendation, adopted by the District cases. I believe this still. Court: But the Report I was convinced when the acknowledged, as I readily [first] Report was issued continue to do, that these that MetLife is being are matters for the state abused by [Appellees] in courts to address, unless their state court actions. very narrow conditions are Illustrative of this abuse is present to allow this court the fact that many of the to stop it. state court complaints are mere reiterations of the App. at 33. Appellees argue that the class action complaint filed District Court did not have the legal authority to criticize Appellees’ conduct in state court, or alternatively that the 2 In its reply brief, Metlife cites to District Court’s criticisms are clearly State Farm Mut. Auto. Ins. Co. v. Campbell, erroneous as a matter of fact. Metlife 123 S.Ct. 1513 (2003), for the proposition responds that the passage reflects wellthat Appellees cannot use evidence of based factual findings on the part of the Metlife’s national practices in their District Court, and should not be individual cases. Campbell, however, is stricken. As defined by this Court, wholly inapposite, as it deals with the dictum is “a statement in a judicial determination of whether a large punitive opinion that could have been deleted damage award can be based on such without seriously impairing the analytical evidence, not whether such evidence can be foundations of the holding.” In re at all relevant to an individual’s lawsuit. -7- McDonald, 205 F.3d 606, 612 (3 rd Cir.