Court Opinion

ID: 868480
Source: CourtListenerOpinion
Date Created: 2013-05-21 18:04:16.321777+00
Date Added: 2024-06-11T15:27:03.597929
License: Public Domain

NOT PRECEDENTIAL

                      UNITED STATES COURT OF APPEALS
                           FOR THE THIRD CIRCUIT
                              ________________

                                       No. 12-3138
                                    ________________

 IN RE: DIET DRUGS (PHENTERMINE/FENFLURAMINE/DEXFENFLURAMINE)
                    PRODUCTS LIABITY LITIGATION

                                          Roberta Haberman,

                                                       Appellant
                                    ________________

                     Appeal from the United States District Court
                        for the Eastern District of Pennsylvania
               (D.C. Civil Action Nos. 2-99-cv-20593/ 2-12-MD-01203)
                     District Judge: Honorable Harvey Bartle, III
                                  ________________

                                  Argued March 5, 2013

            Before: RENDELL, AMBRO, and VANASKIE, Circuit Judges

                               (Opinion filed: May 21, 2013)

Howard J. Bashman, Esquire
Suite G-22
2300 Computer Avenue
Willow Grove, PA 19090

Stanley D. Hudson, Esquire
Kip A. Petroff, Esquire (Argued)
Petroff & Associates
3838 Oak Lawn Avenue, Suite 1620
Dallas, TX 75219

      Counsel for Appellant

Geoffrey J. Michael, Esquire
Arnold & Porter
555 Twelfth Street, N.W.
Washington, DC 20004

Raymond M. Williams, Esquire
DLA Piper
1650 Market Street
One Liberty Place, Suite 4900
Philadelphia, PA 19103

Jules S. Henshell, Esquire (Argued)
Semanoff, Ormsby, Greenberg & Torchia
2617 Huntingdon Pike
Huntingdon Valley, PA 19006

Laurence S. Berman, Esquire
Michael D. Fishbein, Esquire
Arnold Levin, Esquire
Levin, Fishbein, Sedran & Berman
510 Walnut Street, Suite 500
Philadelphia, PA 19106

Charles R. Parker, Esquire
Yetter & Coleman
909 Fannin Street, Suite 3600
Houston, TX 77010

      Counsel for Appellees

                                   ________________

                                       OPINION
                                   ________________

AMBRO, Circuit Judge

      In November 1999, Wyeth L.L.C. (―Wyeth‖) entered into a nationwide class

action settlement agreement (the ―Settlement Agreement‖) related to its marketing of two

weight-loss agents, fenfluramine/phentermine (known as ―fen-phen‖) and

dexfenfluramine, linked to the development of valvular heart disease. When a patient

                                           2
suffers from this condition, blood that is supposed to move in a forward direction through

the heart leaks backward, or regurgitates, through the diseased valve. However, as the

parties acknowledge, other factors can also cause or contribute to the development of this

medical problem; we refer to these as alternative causation factors.

       Under the Settlement Agreement, qualifying diet drug users suffering from

valvular heart disease receive compensation based on their age and the severity level of

their medical condition. In general, to qualify for these benefits, a claimant must be

diagnosed as FDA Positive (having a requisite level of valvular regurgitation).

       The Settlement Agreement has two payment matrices—Matrix A (which provides

greater compensation) and Matrix B (which provides lesser compensation)—that are used

to calculate the compensation a claimant will receive.1 Matrix A applies to claimants

who ingested diet drugs for fewer than 61 days and do not have any of the alternative

causation factors listed by the Settlement Agreement. Matrix B applies to resolve all

other qualifying claims. Claimants whose valvular heart conditions worsen to a higher

severity level are permitted to file supplemental claims seeking additional benefits.

       In 2010, Roberta Haberman—a class member who previously received

compensation under the Settlement Agreement because she suffered from valvular heart

disease2—filed a supplemental claim after undergoing dual heart valve surgery in 2009.

1
  Each Matrix has five severity levels and 11 age groups that determine the amount due to
the claimant.
2
  In 2004, the Settlement Agreement was amended to establish a streamlined process for
resolving the large number of low-level severity claims that had been filed by putative
class members. The amendment did not use the payment matrices to determine the
amount due to each claimant. Instead, claimants received a pro rata distribution from a
                                             3
In her supplemental claim form, she asserted that she was entitled to Matrix A benefits.

She based this claim for additional compensation on a 2002 echocardiogram showing that

she had valvular heart disease and did not have any of the listed alternative causation

factors. The AHP Settlement Trust (the ―Trust‖), which administers the settlement fund,

rejected her request for Matrix A benefits. It determined that Matrix B applied to her

claims because four echocardiograms performed between 2007 and 2009 showed that she

had developed mitral annular calcification—one of the listed alternative causation

factors—prior to her surgery. The District Court affirmed the Trust‘s determination, and

Haberman subsequently filed this appeal.3 Both the Trust and class counsel have filed

briefs opposing her request for Matrix A benefits.

       The question raised on appeal is whether the Settlement Agreement imposes a

time limitation on the medical evidence upon which the Trust may rely in determining

whether a claimant has an alternative causation factor. It is undisputed that FDA Positive

regurgitation, which determines whether a claimant is entitled to Matrix benefits at all,

must be diagnosed by an echocardiogram performed between beginning diet drug use and

the end of the screening period on January 4, 2003. What the parties dispute is whether

newly created fund based on the review of their claims. Haberman was one of the class
members covered by the amendment. She received a distribution of $122,687.57.
3
  The District Court had diversity jurisdiction pursuant to 28 U.S.C. § 1332. We have
jurisdiction over this timely filed appeal under 28 U.S.C. § 1291. ―We apply ‗plenary
review to a district court‘s construction of settlement agreements,‘ but we review any
underlying factual findings for clear error.‖ In re Diet Drugs Prod. Liab. Litig., 706 F.3d
217, 223 n.4 (3d Cir. 2013) (quoting Coltec Indus., Inc. v. Hobgood, 280 F.3d 262, 269
(3d Cir. 2002)) (citing In re Cendant Corp. Prides Litig., 233 F.3d 188, 193 (3d Cir.
2000)).

                                             4
this same limitation applies to the diagnosis of alternative causation factors. Because the

screening period ended on January 4, 2003, application of this limitation would preclude

the Trust from relying on the echocardiograms performed between 2007 and 2009 to

determine whether Haberman‘s claim should be resolved under Matrix A or Matrix B.

       Settlement agreements are interpreted according to ―basic contract principles.‖ In

re Cendant Corp., 233 F.3d at 193. Under Pennsylvania law,4 when a term in an

agreement is clear and unambiguous, its meaning ―must be determined from the four

corners of the contract.‖ Glenn Distribs. Corp. v. Carlisle Plastics, Inc., 297 F.3d 294,

300 (3d Cir. 2002) (citing Steuart v. McChesney, 444 A.2d 659, 661 (Pa. 1982)). In

contrast, ―if the written contract is ambiguous, a court may look to extrinsic evidence to

resolve the ambiguity and determine the intent of the parties.‖ Id. (citing Bohler-

Uddeholm Am., Inc. v. Ellwood Grp., Inc., 247 F.3d 79, 93 (3d Cir. 2001)).

       We believe the Settlement Agreement is unambiguous in not placing a time limit

on the medical evidence on which the Trust can base its determination of whether an

alternative causation factor is present. The relevant provision of the Settlement

Agreement states that Matrix B applies to ―Diet Drug Recipients who ingested [diet

drugs] for sixty-one (61) or more days, who were diagnosed by a Qualified Physician as

FDA Positive by an Echocardiogram performed between the commencement of Diet

Drug use and the end of the Screening Period, with any of the following conditions.‖ J.A.

4
 The parties do not address what jurisdiction‘s law is applicable. We have previously
applied Pennsylvania law in interpreting the Diet Drugs settlement. See In re Diet
Drugs., 706 F.3d at 223 n.5. We presume that Pennsylvania law applies here as well.
                                             5
at 75–77 (emphasis added). It then lists a series of conditions, the alternative causation

factors, among which is mitral annular calcification. Id. at 76.

       On its face, the provision refers to ―Diet Drug Recipients‖ who have ―any of the

following conditions.‖ The commas separating ―who who were diagnosed by a Qualified

Physician as FDA Positive by an Echocardiogram performed between the

commencement of Diet Drug use and the end of the Screening Period‖ support this literal

reading. In addition, some of the alternative causation factors contain their own

timeframes that preclude them from being diagnosed by an echocardiogram performed

between the outset of diet drug use and the end of the screening period. One of the

factors listed, for example, is ―FDA Positive regurgitation (confirmed by

Echocardiogram) prior to [diet drug] use for the valve that is the basis of the claim.‖ Id.

at 77. This alternative causation factor must expressly be diagnosed before, not after, the

beginning of diet drug use.5

       Haberman‘s argument that the temporal limitation does apply to the diagnosis of

alternative causation factors primarily relies on the rule of the last antecedent. This ―rule

generally holds ‗that qualifying words, phrases, and clauses are to be applied to the words

or phrase immediately preceding and not to others more remote.‘‖ Stepnowski v. C.I.R.,

456 F.3d 320, 324 (3d Cir. 2006) (quoting United States v. Hodge, 321 F.3d 429, 436 (3d

Cir. 2003)). Applying this rule, Haberman argues that ―the phrase with any of the

5
 Moreover, at least one other alternative causation factor—a ―[h]istory of daily use of
methysergide or ergotamines for a continuous period of longer than 120 days‖—
presumably cannot be diagnosed by an echocardiogram at all. Id.
                                              6
following conditions modifies the immediately preceding phrase who were diagnosed.‖

Appellant‘s Br. at 26–27 (emphases in original).

       We do not agree that the last-antecedent rule requires us to adopt this reading of

the provision. The rule of the last antecedent, despite its name, is a guide, not a binding

rule of interpretation. Stepnowski, 456 F.3d at 324. As discussed, applying this

limitation to the diagnosis of all alternative causation factors would be, among other

things, at odds with the literal words as well as the timeframes that the Settlement

Agreement provides for some of those factors.

                                      *   *   *   *   *

       To summarize, Haberman argues that the Settlement Agreement prohibits the

Trust from relying on four echocardiograms conducted between 2007 and 2009 to

determine whether she was entitled to Matrix A or Matrix B benefits. The Agreement,

however, does not impose that limitation. Accordingly, we affirm the District Court‘s

order denying her challenge to the Trust‘s determination that she is not entitled to Matrix

A benefits.

                                              7