Opinion ID: 3011704
Heading Depth: 1
Heading Rank: 2

Heading: facts

Text: The circumstances surrounding the pedicle bone screw litigation and resulting settlement by Acr oMed have received more complete and eloquent exposition in other opinions than is required in this appeal. See, e.g., In re: Orthopedic Bone Screw Prods. Liab. Litig., 193 F.3d 781, 784-87 (3d Cir. 1999). As a result, we cover only the highlights and how they pertain to Sambolin's claims. The multidistrict litigation of orthopedic bone scr ew 3 products liability claims has been directed by the ninemember PLC, which agreed, in December 1996, to settle with one of the principal manufacturers of bone screws -- AcroMed. Under the terms of the Settlement Agreement,1 AcroMed agreed to create a fund of $100 million, plus the proceeds of the bulk of its insurance policies, in return for a complete release from liability by the certified class.2 Because the $100 million exceeded AcroMed's ear nings or net assets at the time, it was obtained by monetizing AcroMed's future earnings and was conditioned on the resolution of this action. The District Court granted mandatory, non-opt-out class certification under Fed. R. Civ. P. 23(b)(1) and preliminarily appr oved the Settlement Agreement on January 16, 1997 in Pretrial Order (PTO) No. 724.3 In re: Orthopedic Bone Screw Prods. Liab. Litig., No. M.D.L. 1014, 1997 WL 303242 (E.D. Pa. January 16, 1997) (hereinafter PTO 724). The Court's final approval of the Settlement Agreement followed on October 17, 1997. In re: Orthopedic Bone Screw, 176 F .R.D. at 186. The class certified in the settlement included all persons who underwent surgical implanting of Acr oMed bone screws through December 31, 1996, a gr oup estimated by the parties to exceed 100,000. Id. at 170-71, 173. These _________________________________________________________________ 1. Though the Settlement Agreement was the subject of frequent revision, none of its provisions relevant to this appeal were changed. 2. Under the Settlement Agreement, the r eleased parties include AcroMed and any treating physicians and hospitals who might be liable on a products liability theory. However, claims for independent medical malpractice against these physicians and hospitals will not be dismissed under the settlement. In re: Orthopedic Bone Screw, 176 F.R.D. at 166. 3. Though not directly pertinent to this appeal, it should be noted that the District Court's grant of certification r easoned that AcroMed had a limited fund with which to meet the demands of plaintiffs. In re: Orthopedic Bone Screw, 176 F.R.D. at 177. Since that ruling, the limited fund of a defendant to meet claims has been substantially circumscribed by the Supreme Court as a basis for the maintenance of a class action. See Ortiz v. Fibreboar d Corp., 527 U.S. 815 (1999) (when a mandatory class action is certified on a limited fund theory, the fund must be limited independently of the parties' agr eement). Before the ruling in Ortiz, the appeal of the settlement's approval in this case was voluntarily dismissed. 4 class members were required by the Settlement Agreement to file two documents to perfect their rights to recovery. First, it required claimants to file a Registration Form by May 1, 1997 to participate in the settlement. PTO 724, P 12. The Registration Form requir ed, inter alia, listing the claimant's name, address, age, Social Security number, legal representation and date and type of bone screw surgery. Second, the Settlement Agreement required the filing of a Proof of Claim form, which was to be drafted by the later-appointed Claims Administrator to permit an equitable distribution of the settlement fund. The Claims Administrator was appointed in January 1998 and a Pr oof of Claim form was agreed on by the parties and approved by the Court on January 6, 1999. PTO 1655. The Pr oof of Claim form contained extensive release and indemnity terms and required claimants to describe and document their medical histories with the AcroMed bone screws in some detail. It further stated that it must be mailed to the Claims Administrator postmarked no later than April 15, 1999. The Court was unequivocal in its statement of the consequence of a failure to file timely both forms. Settlement Class Members who are Acr oMed Orthopedic Bone Screw Recipients and who do not timely Register and submit Claims Forms are not entitled to share in the AcroMed Settlement Fund, [and] ar e . . . barred and enjoined from asserting Settled Claims. PTO 724, P 12. Nevertheless, neither of the deadlines for the two forms escaped postponement. The May 1, 1997 Registration Form deadline was pushed back until May 15, 1997 due to administrative difficulties caused by receiving and processing the large volume of registrations. Almost two years later, the Proof of Claim deadline was delayed twice, cumulatively from April 15, 1999 until June 15, 1999, to remedy the difficulties of many claimants documenting their injuries. PTO 1802. Pretrial Order No. 724 also approved the settlement's notice procedures. The Settlement Agr eement required the PLC to mail a settlement notice and the Registration Form to known class members, primarily persons who had already filed suit against AcroMed or who had identified themselves to the PLC by responding to a series of 5 advertisements placed by various plaintiffs' attorneys. This group was comprised of 6,949 persons who wer e either class members or related claimants. The Settlement Agreement further provided for additional constructive notice in certain newspapers. Pursuant to the Court's order and the Settlement Agreement, formal notice was published during January and February 1997 as follows: twice in USA Today, a national newspaper with a cir culation of 1.9 to 2.4 million; once in TV Guide, a national magazine with a circulation of 13 million; once in Parade Magazine, a national Sunday newspaper insert with a circulation of 81 million; and once in a Spanish-language newspaper of general circulation in Puerto Rico. PTO 724, P 8. The Puerto Rican newspaper chosen was El Nueva Dia , published in San Juan, Puerto Rico. The notice in El Nueva Dia ran on January 24, 1997 in small text on page 50. The publication notice published in each of the periodicals contained basic information about the settlement, including the May 1, 1997 Registration Form deadline, and the address of the PLC where potential class members could write for more information. Other than the PLC's address, the notice listed no other means to receive further information, no telephone number (toll-fr ee or otherwise) and no internet address. Purportedly as a result of the published notice, the PLC received 1,457 r equests for further information or registration for ms by late April 1997. Sambolin lives outside Luquillo, a seaside village on the Northeast coast of Puerto Rico. He had AcroMed pedicle screws implanted in his spine on April 3, 1995 4 to treat recurring back pain. Sambolin's initial r ecovery went well, but six weeks following the surgery he experienced severe back pain. Physicians later diagnosed the pain as the result of one loose and one broken AcroMed scr ew, and both were extracted in June 1996. According to Sambolin, the AcroMed screws caused him severe pain and ongoing medical difficulties. Sambolin communicated with attorneys in Puerto Rico at some point in 1997, but they failed to inform him of the settlement. Later that year , he spoke with _________________________________________________________________ 4. Because the settlement class includes all r ecipients of AcroMed pedicle screws before December 31, 1996, it is undisputed that Sambolin is within the certified class. 6 a Miami attorney who apprised him of the class action and settlement and helped him prepare the necessary paperwork. Without delay, the settlement Registration Form was signed on December 16, 1997, and subsequentlyfiled with the Claims Administrator, approximately seven months after the May 1 deadline stated in the notices and r epeated on the Registration Form. In September 1998, the Claims Administrator submitted the Proposed Plan of Settlement Administration (the Proposed Plan) for the Court's appr oval. Among other details, the Proposed Plan stated that class members who failed to submit the Registration Form by the May 1997 deadline were subject to a 20% reduction in award points, and not total disqualification from participation in the settlement. Withholding judgment on the Pr oposed Plan, the District Court approved the Proof of Claim form accompanying the Plan on January 6, 1999. PTO 1655. It then was disseminated to all settlement registrants, whether timely or not. Sambolin filed his Proof of Claim on February 10, 1999, well before the initial April 15, 1999 deadline. Shortly afterward, he requested of the Claims Administrator that the 20% reduction in the Proposed Plan be waived as to his claim because the notice of the registration deadline was deficient. On February 22, 1999, the District Court issued PTO 1722, which rejected the 20% discounting pr ovision of the Proposed Plan and reasserted its position in PTO 724 -- that May 1, 1997 was an absolute deadline for r egistration, as stated in the notices and on the Registration For m. The Court did, however, extend the registration deadline to May 15, 1997 to remedy any receipt date pr oblems encountered by the large numbers of registrations r eceived by the PLC during that period. The absolute deadline for r egistration of May 15, 1997 was restated again in PTO 1757, but the Court in this order also permitted late r egistrants, such as Sambolin, to show cause to the Claims Administrator why their claims should be deemed timely. Sambolin responded to the show cause or der with a onepage statement asserting ignorance of the settlement and lack of notice. That response was rejected by the Claims Administrator. Sambolin protested his exclusion from the 7 settlement in a motion filed with the Court r equesting relief from PTO 1722. That motion, which is the subject of this appeal, was considered at a November 22, 1999 status conference and was rejected by the Court in PTO 1870 without comment. In PTO 1930 the District Court addressed, in bulk, the validity of claims presented by untimely r egistrants in their appeal from the Claims Administrator's r ejection of their claims. In re: Orthopedic Bone Scr ew, C.A. No. 97-381, 2000 WL 1023782 (E.D. Pa. July 10, 2000). That or der addresses the claims of 168 class members who failed to file the Registration Form by May 15, 1997 and who r esponded to the show cause order of PTO 1757, including Sambolin. The Court first rejected claims that the settlement's notice provisions were inadequate under Fed. R. Civ. P. 23(b)(1) and related principles of due process. Id. at . It further applied the excusable neglect standar d we later address in this opinion and permitted eight persons to participate in the settlement under its rationale. Id. at . All of the eight late registrants included in the settlement suf fered from debilitating medical disabilities that prevented the timely perfection of their claims. Id. According to the Claims Administrator, there have been 534 late filings of the Registration Form as of February 14, 1999. Between 243 and 306 of these arrived befor e Sambolin's Registration Form in December 1997. According to the PLC's records, there ar e 104 claimants in Sambolin's predicament -- an untimely Registration For m but a timely Proof of Claim. Assuming that Sambolin's statements in his Proof of Claim are accurate, the Claims Administrator has estimated his gross award at $33,000, subject to deductions for legal fees and potential subr ogation claims.