Court Opinion

ID: 6982522
Source: CourtListenerOpinion
Date Created: 2022-07-24 02:33:50.755241+00
Date Added: 2024-06-11T16:09:16.498343
License: Public Domain

WIGGINS, Circuit Judge,
concurring:
I concur in the result of Judge O’Scann-lain’s majority opinion. I write separately to explain why I changed my vote in this appeal.
The long history of this case evinces the complexity of the issues involved. In our original disposition, we found that the Delaware judgment was not a bar to further prosecution of the federal action under the Full Faith and Credit Act, 28 U.S.C. § 1738. See Epstein v. MCA, Inc., 50 F.3d 644 (9th Cir.1995). The Supreme Court reversed, concluding that the Delaware judgment was entitled to full faith and credit even if it released claims within the exclusive jurisdiction of the federal courts. See Matsushita Elec. Indus. Co., Ltd. v. Epstein, 516 U.S. 367, 116 S.Ct. 873, 134 L.Ed.2d 6 Matsushita”). Following remand, we were presented with the issue that is the subject of this appeal.
After our initial consideration of this appeal, I joined Judge Norris’ well-written opinion. See Epstein v. MCA, Inc., 126 F.3d 1235 (9th Cir.1997). We found that the adequacy of representation issue was left open by the Supreme Court and was not fully and fairly litigated in state court. See id. at 1237-48. Proceeding to the merits of the adequacy of representation issue, the opinion convincingly concluded that Delaware counsel provided inadequate representation: “This was not merely ‘inadequate’ representation, it was hostile representation that served the interests of counsel in getting a fee, but did not serve the interests of the MCA shareholders in getting a settlement based upon a thorough and fair assessment of their Exchange Act claims.” Id. at 1255.
I remain troubled by the substance of the Delaware settlement. Soon after the opinion was filed, however, I began to have grave doubts about the conclusion that the adequacy of representation issue was not fully and fairly litigated in the Delaware courts. It is this issue that led me to change my vote.
I now believe that, while the Supreme Court did not conclusively resolve the due process issue before the remand, it did send unmistakable signals on that very issue. In three separate passages, the Court indicated that the Delaware courts likely had already conclusively resolved the due process issue.1 Our original ma*651jority disposition in this appeal did not give sufficient weight to these admonitions.
The Supreme Court’s conclusion is clearly supported by the record. One of the objectors, William Krupman, explicitly opposed the proposed settlement because “the purported class representatives ... had proposed a settlement that benefitted no one but their own attorneys. They did not provide adequate representation to the class.” Affidavit of William A Krupman at 2-3, In re MCA, Inc. Shareholders Litig., Civ. A. No. 11740, 1993 WL 43024 (Del.Ch. Feb.16, 1993) (emphasis added). In considering Krupman’s objection, the Chancery Court felt that his objection concerning the adequacy of the class representatives’ representation of the class members was similar to the ' objection raised by another objector, Pamela Minton de Ruiz, who objected to the settlement “on the basis that the settlement is collusive.” In re MCA, Inc. Shareholders Litig. 1993 WL 43024 *3. The Chancery Court nonetheless approved the settlement because the settlement was “in the best interest of the class,” notwithstanding these objections to the adequacy of the class representatives’ representation. Id.
Because the adequacy of representation issue was fully and fairly litigated and necessarily decided in the Chancery Court, the Delaware courts would give preclusive effect to that determination. See Messick v. Star Enter., 655 A.2d 1209, 1211 (Del.1995). The Full Faith and Credit Act, 28 U.S.C. § 1738, requires that we “treat a state court judgment with the same respect that it would receive in the courts of the rendering state.” Matsushita, 516 U.S. at 373, 116 S.Ct. 873. As such, we are required to give preclusive effect to the Chancery Court’s judgment that class representation was adequate irrespective of whether we agree with that determination. I therefore concur.

. First, in Part I of it opinion, as it described the procedural posture of the case it stated that "[a]fter argument from several'objectors, the [Chancery] court found the class represen-*651lation adequate....” Matsushita, 516 U.S. at 371, 116 S.Ct. 873. Later, in explaining why it believed that the Delaware courts would afford preclusive effect to the settlement judgment, the Supreme Court explained -that "[t]he Court of Chancery ‘further determined that the plaintiffsf,] ... as representatives of the Settlement Class, have fairly and adequately protected the interests of the Settlement Class.'” Id. at 378, 116 S.Ct. 873 (quoting Order and Final Judgment at 2, In re MCA, Inc. Shareholders Litigation, Civ. A. No. 11740, 1993 WL 43024 (Del.Ch. Feb.16, 1993))(internal quotation marks omitted). Finally, the Court expressed its astonishment at plaintiffs’ decision to assert their due process claim ‘‘in spite of the Chancery Court's express ruling, following argument on the issue, that the class representatives fairly and adequately protected the interests of the class.” Id. at 379 n. 5, 116 S.Ct. 873.