Court Opinion

ID: 3014163
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Date Created: 2015-10-13 22:01:37.735936+00
Date Added: 2024-06-11T11:46:50.726732
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Opinions of the United
2004 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

5-25-2004

In Re: Diet Drugs
Precedential or Non-Precedential: Precedential

Docket No. 02-4582

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Recommended Citation
"In Re: Diet Drugs " (2004). 2004 Decisions. Paper 645.
http://digitalcommons.law.villanova.edu/thirdcircuit_2004/645

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                   PRECEDENTIAL                      FENFLURAMINE/
                                                   DEXFENFLURAMINE)
       UNITED STATES                          PRODUCTS LIABILITY LITIGATION
      COURT OF APPEALS
    FOR THE THIRD CIRCUIT                          Keith K. Barlow, Ruby S. Barlow,
                                                   Cherry Barnes, Joe Wayne Burton,
                                                   Nora K. Burton, Lonelle S. James,
     Nos. 02-4582, 03-2033,                        Michael J. Miller, Kenneth W.
      03-2936, and 03-4362                         Smith, Miller & Associates,
                                                   Edward A. Williamson, Fenton B.
                                                   DeWeese, II, The Law Office of
      IN RE: DIET DRUGS                            Edward A. Williamson, Merrida
       (PHENTERMINE/                               Coxwell, Charles R. Mullins,
       FENFLURAMINE/                               Coxwell & Associates, PLLC, and
     DEXFENFLURAMINE)                              Eugene C. Tullos,
PRODUCTS LIABILITY LITIGATION
                                                   Appellants (03-2936)
    Linda Smart, a class member who
    has exercised her intermediate opt-
    out rights                                      IN RE: DIET DRUGS
                                                     (PHENTERMINE/
    Appellant (02-4582)                              FENFLURAMINE/
                                                   DEXFENFLURAMINE)
                                              PRODUCTS LIABILITY LITIGATION
      IN RE: DIET DRUGS
       (PHENTERMINE/                               Linda Eichmiller, Brenda Cook,
       FENFLURAMINE/                               Richard Cook, Doris Caldwell,
     DEXFENFLURAMINE)                              Susan McCarty, Jim McCarty, Jr.,
PRODUCTS LIABILITY LITIGATION                      Julia Campbell, Carolyn Winters,
                                                   Bobby G. Winters, Macy Houston,
    Clara Clark, Linda Smart, George               and John F. Houston, III,
    M. Fleming, Fleming & Associates,
    L.L.P., Mike O’Brien and Michael               Appellants (03-4362)
    C. Abbott,

    Appellants (03-2033)                              On Appeal from the
                                               United States District Court for the
                                                Eastern District of Pennsylvania
      IN RE: DIET DRUGS                                (MDL No. 1203)
       (PHENTERMINE/                               District Judge: Honorable

                                          1
           Harvey Bartle, III                 Michael J. Miller, Esq.
                                              Christopher A. Gomez, Esq.
                                              Michelle DeMartino, Esq.
      Argued: December 10, 2003               Kenneth W. Smith, Esq.
                                              Michael J. Miller & Associates
                                              809 Cameron Street
Before: AMBRO, FUENTES              and       Alexandria, VA 22314
CHERTOFF, Circuit Judges
                                              Attorneys for Appellants
                                              Keith Barlow, et al.
     (Opinion filed May 25, 2004)
                                              Fred S. Longer, Esq.
                                              Arnold Levin, Esq.
John G. Harkins, Jr. (Argued)                 Michael D. Fishbein, Esq.
Steven A. Reed                                Levin, Fishbein, Sedran & Berman
Harkins Cunningham                            510 Walnut Street
2800 One Commerce Square                      Suite 500
2005 Market Street                            Philadelphia, PA 19106
Philadelphia, PA 19103-7042
                                              Attorneys for Appellees
Attorneys for Appellant                       Plaintiff Class and Class Counsel
Linda Smart
                                              Robert D. Rosenbaum, Esq.
George M. Fleming, Esq.                       Arnold & Porter
Sylvia Davidow, Esq.                          555 12th Street, N. W.
Rand P. Nolen                                 Washington, D.C. 20004
Scott A. Love
Fleming & Associates, L.L.P.                  Peter L. Zimroth, Esq. (Argued)
1330 Post Oak Boulevard, Suite 3030           Arnold & Porter
Houston, TX 77056                             399 Park Avenue
                                              New York, NY 10022-4690
Mike O’Brien, Esq.
Mike O’Brien, P.C.                            Attorneys for Appellee
1330 Post Oak Boulevard, Suite 2960           American Home Products Corporation
Houston, TX 77056
                                              Robert S. Conrad
Attorneys for Appellants                      National Chamber Litigation Center, Inc.
Linda Smart, Clara Clark, et al.,             1615 H Street, N.W.
and Linda Eichmiller, et al.                  Washington, D.C. 20062

                                          2
Miriam Nemetz                                 Denise A. Rubin
Carl J. Summers                               Napoli, Kaiser, Bern & Associates
Mayer, Brown, Rowe & Maw LLP                  3500 Sunrise Highway
1909 K Street, N.W.                           Suite T-207
Washington, D.C. 20006                        Great River, NY 11739

Attorneys for Amicus                          James H. Pearson
The Chamber of Commerce                       M. Bain Pearson
of the United States                          Pearson & Pearson, L.L.P.
                                              M. Bain Pearson
Ellen A. Presby                               1330 Post Oak Blvd., Suite 2900
Steve Baughman Jensen                         Houston, TX 770456
S. Ann Saucer
Baron & Budd, P.C.                            Attorneys for Amicus
3102 Oak Lawn Avenue, Suite 1100              Opt-Out Plaintiffs’ Counsel
Dallas, TX 75219

Attorneys for Amicus
Class Members Represented by                                  OPINION
Baron & Budd, P.C.

W. Lewis Garrison
                                              Chertoff, Circuit Judge.
Ursula Tracy Doyle
Garrison Scott Gamble & Rosenthal, P.C.
P.O. Box 11310
                                                       This appeal arises out of the
Birmingham, AL 35202
                                              settlement of a complex multidistrict
                                              federal mass tort class action. As part of
Attorneys for Amicus
                                              the complicated settlement agreement,
Opt-Out Plaintiffs’ Counsel
                                              class members were entitled to opt out at
                                              various stages. Those who chose to opt
Leslie A. Brueckner
                                              out initially were freed to pursue their
Michael J. Quirk
                                              remedies elsewhere. Those who did not
Trial Lawyers for Public Justice, P.C.
                                              opt out at the beginning were afforded
1717 Massachusetts Avenue, N.W., Suite
                                              opportunities to opt out “downstream” at
800
                                              an intermediate stage or at the “back-end.”
Washington, D.C. 20036
                                              But those downstream opt-out rights were
                                              not absolute.       Rather, members who
Attorneys for Amicus
                                              elected to delay an opt-out beyond the
Trial Lawyers for Public Justice
                                              initial stage were informed that they would

                                          3
not have unfettered ability to litigate all        resolving millions of claims in a way that
claims elsewhere. Instead, among other             affords deserving claimants some measure
things, these so-called intermediate and           of relief while preserving a defendant
back-end class “opt-outs” were precluded           business as a viable entity that can actually
under the settlement agreement from                pay compensation. See In re Gen. Motors
pursuing punitive, exemplary, or multiple          Corp. Pick-Up Truck Fuel Tank Prods.
damages.                                           Liab. Litig., 55 F.3d 768, 784 (3d Cir.
                                                   1995). All claimants benefit from such an
        The questions presented here arise
                                                   outcome, because each has a fair
from the District Court’s efforts to enforce
                                                   opportunity at recovery. Later claimants
the terms of the settlement against
                                                   need not fear that the fund will be
intermediate opt-out class members now
                                                   exhausted before their turn comes, or that
litigating their claims in various state
                                                   the defendant will undertake a scorched
courts. What appellee class counsel and
                                                   earth defense that consumes assets
appellee defendant fear is that counsel for
                                                   otherwise available for compensation, or
intermediate opt-outs will undermine the
                                                   simply turn off the spigot by filing for
efficacy of the settlement by evading or
                                                   bankruptcy. The defendant, too, obviously
circumventing the punitive damages
                                                   benefits from a limit to liability that
restrictions to which they are bound under
                                                   ensures corporate survival. For this type
the agreement.      Appellants, who are
                                                   of global settlement to work, however, the
individual intermediate opt-outs now
                                                   district court must successfully discharge
pressing claims in state court, complain
                                                   the herculean task of enforcing the terms
that the District Court has gone beyond
                                                   of the class settlement agreement against
enforcing the plain restrictions of the
                                                   the constant pressure of some settlement
settlement and has taken steps that will
                                                   class members who, having obtained part
hamper or defeat plaintiffs’ ability to
                                                   of a loaf through the agreement, now
pursue claims that are not barred by the
                                                   pursue alternative avenues to obtain
settlement.
                                                   additional slices. Otherwise, individual
        In one sense, the issues framed in         class members’ activities “would be
the appeal reflect efforts by creative             disruptive to the district court’s ongoing
counsel on both sides to interpret and             settlement management and would
apply settlement terms so as to gain               jeopardize the settlement’s fruition.”
advantage in the individual lawsuits               Carlough v. Amchem Prods., Inc., 10 F.3d
brought by intermediate opt-outs in                189, 204 (3d Cir. 1993).
various state courts.         B ut larger
                                                          As appealing as the efficiencies of
institutional and fairness issues are at
                                                   a nationwide mass tort class settlement
stake.
                                                   may be, however, the Supreme Court has
     The nationwide class settlement is            repeatedly cautioned that they cannot
a device that holds the promise of                 override fundamental principles of due

                                               4
process or faithful application of                 federal courts to intrude into the domain of
controlling law. See Ortiz v. Fibreboard           state courts administrating their own laws
Corp., 527 U.S. 815, 845-48 (1999);                implicates a host of sensitive concerns and
Amchem Prods., Inc. v. Windsor, 521 U.S.           is therefore limited. See, e.g., Rizzo v.
591, 620 (1997); Phillips Petroleum Corp.          Goode, 423 U.S. 362, 379-80 (1976);
v. Shutts, 472 U.S. 797, 812 (1985).               Huffman v. Pursue, Ltd., 420 U.S. 592,
Because a class settlement disposes of the         600-01 (1975).
rights of many people who are absent from
                                                           In addition, as with any injunction,
the proceeding and only virtually
                                                   traditional principles of equity apply. The
represented by class counsel, due process
                                                   terms of any injunction, for example, must
considerations such as adequacy of notice
                                                   be commensurate with the violation the
and adequacy of representation have
                                                   court seeks to remedy. And practical
special force. Ortiz, 527 U.S. at 847-48.
                                                   considerations such as manageability and
As we observed in our opinion in Georgine
                                                   enforceability militate against an order that
v. Amchem Prods., Inc.—in a passage
                                                   enmeshes a district court in protracted
endorsed by the Supreme Court, see 521
                                                   micromanagement of litigation in a state
U.S. at 628—inadequacies in the quality of
                                                   court.      These principles of equity
notice raise “serious fairness concerns.” 83
                                                   counseling restraint take on particular
F.3d 610, 634 (3d Cir. 1996).
                                                   significance when issues of federalism are
        Moreover, when a federal court             involved.      When federal courts are
seeks to effectuate a settlement agreement         confronted with requests for relief that
by way of enjoining state court                    require interference with state civil
proceedings, additional constraints qualify        functions, “they should abide by standards
its authority. We have held that district          of restraint that go well beyond those of
courts have the authority under the All            private equity jurisprudence.” Huffman,
Writs Act, 28 U.S.C. § 1651, to protect 420 U.S. at 603.
their jurisdiction by enjoining state court
                                                           All of these concerns come to bear
proceedings that interfere with a judicially
                                                   on our resolution of the appeal from the
approved settlement. See In re Prudential
                                                   District Court’s orders in this case. For the
Ins. Co. Sales Practices Litig., 314 F.3d
                                                   reasons stated in this opinion, we agree
99, 103-05 (3d Cir. 2002) (hereinafter
                                                   that the District Court had power under the
Prudential II); In re Diet Drugs Prods.
                                                   All Writs Act to supervise and curtail the
Liab. Litig., 282 F.3d 220, 233-39 (3d Cir.
                                                   actions of intermediate opt-out class
2002) (hereinafter Diet Drugs I). But the
                                                   members in pursuing their individual
Anti-Injunction Act, 28 U.S.C. § 2283, and
                                                   claims. But we believe that the injunctions
federalism concerns circumscribe this
                                                   imposed some restrictions not fairly
power and require that it be “construed
                                                   comprehended within the terms of the
narrowly” and invoked sparingly. Diet
                                                   settlement agreement and class notice and,
Drugs I, 282 F.3d at 233-34. The power of
                                                   in certain ways, transgressed the limits of

                                               5
federalism and prudence that confine the                                  Following the FDA’s issuance of
exercise of federal judicial authority.                        the public health warning and W yeth’s
                                                               withdrawal of the diet drugs from the
            Emphatically, the District Court is
                                                               market, approximately eighteen thousand
empowered to protect its jurisdiction and
                                                               individual lawsuits and over one hundred
effectuate the settlement agreement. In
                                                               putative class actions were filed in federal
this case, however, elements of the
                                                               and state courts around the country. Most
protective orders in question must be
                                                               plaintiffs alleged that the drugs caused
refashioned to be consistent with fair class
                                                               them to suffer from VHD. A small
notice, to respect appropriate boundaries in
                                                               fraction claimed the drugs caused them to
relation to state courts, and to accord with
                                                               s u f f e r f ro m pr i m a r y p u l m o n a ry
t r a d it i o n a l p r i n c i p l e s o f e q u i t y
                                                               hypertension (“PPH,” a rare and often fatal
jurisprudence.
                                                               lung disease), neurotoxic injuries, or other
                           I.                                  assorted injuries. In December of 1997,
                                                               the Judicial Panel for Multidistrict
                          A.
                                                               Litigation transferred all the federal
        The history of this litigation was                     actions to Judge Louis Bechtle in the
previously detailed in our opinion in Diet                     United States District Court for the Eastern
Drugs I, 282 F.3d at 225-29. The cases                         District of Pennsylvania, creating
marshaled before the District Court arose                      Multidistrict Litigation 1203 (“MDL
from the marketing of two appetite                             1203”).2
suppressants, fenfluramine (sold as
                                                                       In April of 1999, Wyeth began
“Pondimin”) and dexfenfluramine (sold as
                                                               “global” settlement talks with plaintiffs in
“Redux”). Appellee American Home
                                                               the federal action together with several
Products 1 removed the drugs from the
                                                               plaintiffs in similar state class actions.
market in September of 1997, after data
                                                               The parties reached a tentative settlement
came to light suggesting a link between
                                                               agreement for a nationwide class in
use of the drugs and valvular heart damage
                                                               November of 1999. Soon thereafter, on
(“VHD”) and after the United States Food
                                                               November 23, 1999, the District Court
and Drug Administration (“FDA”) issued
                                                               conditionally certified a nationwide
a public health advisory alert. By that
                                                               settlement class and, concurrently,
time, four million people had taken
                                                               preliminarily approved the settlement.
Pondimin over the previous two years, and
two million people had taken Redux.                                   The Court scheduled a fairness
                                                               hearing for May 1, 2000 on class

         1
        American Home Products changed
                                                                      2
its name to Wyeth in March of 2002. We                                 Judge Bechtle has since retired,
use the name Wyeth for the remainder of                        and Judge Harvey Bartle, III, now presides
the opinion.                                                   over MDL 1203.

                                                           6
certification and final settlement approval.       members who are medically and otherwise
On August 28, 2000, the District Court             eligible opportunities to opt out at a later
entered a final order certifying the class         time, at an intermediate stage.4 Those who
and approving the settlement.                      choose to opt out at an intermediate stage
                                                   receive no compensation but are permitted
                                                   to pursue most of their “settled claims”
                    B.                             individually, subject to certain restrictions.
                                                   The settlement agreement provides, in
        The settlement agreement embraces
                                                   relevant part:
all persons who took Pondimin or Redux.
Wyeth undertook to pay up to $3.75 billion                [Intermediate opt-outs] may
(present value) to fund benefits to                       n o t s e e k p u n i t iv e ,
members of the class. Settling class                      exemplary, or any multiple
members agreed in return to release W yeth                damages against [Wyeth and
from all claims arising out of their                      other released parties]; . . . .
ingestion of the drugs, other than claims                 [Intermediate opt-outs] may
based on PPH brought by individuals who                   not use any pre vious
met certain medical criteria.                             verdicts o r j ud g m ents
                                                          against [Wyeth], or factual
       The agreement was crafted to avoid
                                                          findings necessary to such
an all-or-nothing choice at the threshold.
                                                          verdicts or judgments, for
Rather, several opt-out points were
                                                          purposes of establishing
envisioned at various places along the
                                                          claims or facts in order to
continuum of the settlement period.
                                                          obtain a verdict or judgment
Putative class members who wished to opt
                                                          . . . .      Nor may [an
out entirely from the settlement, foregoing
                                                          intermediate opt-out] . . .
all benefits and any restrictions, were
                                                          seek to introduce into
obliged to file their opt-out notices by
                                                          evidence against [Wyeth],
March 30, 2000. Drug users who chose
                                                          for any purpose, such a
not to opt out initially became settlement
                                                          verdict, judgment or factual
class members, bound not to assert “settled
                                                          finding.
claims” against Wyeth except as the
agreement permits.3                                Joint App. 616-17.
       The    agreement     allows    class               In return for intermediate opt-outs’

       3                                                  4
           “Settled claims” generally                      Some class members who did not
included all conceivable claims arising out        exercise an intermediate opt-out reserved
of purchase and use of the diet drugs but          a so-called “back-end” opt-out right.
specifically excluded, among other things,         Back-end opt-out rights are not at issue in
claims based on PPH.                               this appeal.

                                               7
acceptance of the limitation on punitive            her physician in 2002, alleging claims of
and multiple damages, Wyeth agreed not              negligence, products liability, improper
to assert any statute of limitations, laches,       warnings, and fraud.         Clark’s final
or claims-splitting defenses against                amended petition seeks recovery of
allowed individual claims.                          compensa tory da ma ge s, inc luding
                                                    damages for pain, disfigurement, mental
        In approving the settlement, the
                                                    anguish, and medical expenses. Likewise,
District Court expressly relied in part on
                                                    Smart’s petition alleges claims against
the finding that “class members had an
                                                    Wyeth and her physician for actual
opportunity to preserve their punitive
                                                    damages for pain, disfigurement, anguish,
damages claims by exercising the initial
                                                    and medical expenses arising from state
opt out.” In re Diet Drugs Prods. Liab.
                                                    tort claims of negligence, failure to warn,
Litig., No. 99-20593, 2000 WL 1222042,
                                                    and design defect.
at *49 n.22 (E.D. Pa. Aug. 28, 2000)
(“Memorandum and Pretrial Order No.                          Meanwhile, in state court in
1415,” hereinafter “PTO 1415”). The                 Mississippi, class member Lonelle James,
District Court also observed that the               and others, also filed claims against Wyeth
waiver of punitive damages was not an               after exercising their intermediate opt-out
inappropriate “trade-off,” since “punitive          rights. James was selected as the first trial
damage claims are often illusory” and               plaintiff. Her claims were based on state
subject to judicial limitation or reduction         law theories of negligence, strict liability
as a matter of fairness to the defendant. Id.       for design and m arketing defect,
In addition, the District Court expressly           inadequate and improper warnings,
retained jurisdiction to “enforce the               misrepresentation, and breach of implied
Settlement in accordance with its terms;            warranty. James sought compensatory
. . . and to enter such other and further           damages—including damages for pain and
orders as are needed to effectuate the terms        m e n t a l a n g u i s h , l o s t e a r n i n g s,
of the Settlement.” Id. at *72.                     disfigurement, physical impairment,
                                                    medical expenses, and loss of enjoyment
       This Court affirmed PTO 1415
                                                    of life—from both Wyeth and her
without opinion. In re Diet Drugs Prods.
                                                    physician.
Liab. Litig., 275 F.3d 34 (3d Cir. 2001).
                                                            Plaintiffs’ state court claims were
                     C.
                                                    pleaded in terms that appeared to abide by
       A number of class members who                the terms of the settlement preclusion of
did not exercise their initial opt-out rights       punitive and multiple damages. But the
elected to opt out at the intermediate stage.       actual conduct of the litigation raised
Plaintiffs Clara Clark and Linda Smart,             justifiable fear in the District Court, and
both represented by the Texas law firm of           among the counsel for defendant and the
Fleming & Associates, filed lawsuits in             class, that the plaintiffs were seeking to
Texas state court. Clark sued Wyeth and             obtain through the back door what they

                                                8
were barred from receiving through the                   any medical condition of
front.     Reviewing the state court                     plaintiff caused by Wyeth
submissions by Clark’s counsel, the                      other than mitral valve
District Court found—and this is                         regurgitation [VHD ] or
undisputed— that Clark’s case summary                    pulmon ary hyperten sion
was “replete with statements leading                     secondary to mitral valve
ineluctably to the conclusion that such                  regurgitation.
punitive damages are being sought, even
                                                  Id. at ¶¶ 2-3.
though not by that name.” In re Diet Drugs
Prods. Liab. Litig., No. 99-20593,                        Soon thereafter counsel Fleming’s
Memorandum and Pretrial Order No.                 other client, Linda Smart, found her state
2625, at 2 (E.D. Pa. filed October 16,            court case brought to the attention of the
2002) (hereinafter “PTO 2625”). Clark’s           District Court. The District Court noted
case summary expressed the intent to offer        that Fleming was obviously aware of the
evidence concerning “‘tens of thousands           ruling in the Clark litigation, but
of people [who] were injured’”; Wyeth’s           nevertheless had submitted a proposed jury
guilt of “‘corporate avarice’”; and its           charge containing inflammatory language
alleged “‘goal of increasing profits at the       and references to destruction of evidence
expense of human life.’” Id. at 2-3. Worse        and a cover up. The District Court
yet, another submission (in a perhaps             rejected the contention that this evidence
Freudian slip) averred that, among other          was admissible on issues properly before
things, “‘[p]laintiff seeks punitive              the state trial court and concluded that
damages.’” Id. at 4. Before the District
                                                         to allow a class member to
Court, Clark’s counsel disavowed that
                                                         introduce into evidence or to
claim as an error. The District Court
                                                         argue the elements of a
concluded, however, that Clark’s counsel
                                                         punitive damage claim on
was seeking to “circumvent” the punitive
                                                         the condition that he or she
damages bar and enjoined him from:
                                                         does not specifically request
       introducing any evidence or                       punitive damages by name.
       making any statement                              . . . would create a giant
       before or argument to the                         loophole.
       court or jury related directly
                                                  In re Diet Drugs Prods. Liab. Litig., No.
       or indirectly to (a) punitive,
                                                  99-20953, Memorandum and Pretrial
       exem plary or multiple
                                                  Order No. 2680, at 7 (E.D. Pa. filed
       damages,           however
                                                  December 11, 2002) (hereinafter “PTO
       d e s c r ib e d ; and (b )
                                                  2680”). Consequently, the Court issued an
       malicious, wanton or other
                                                  injunction similar to that in the Clark case.
       similar conduct of Wyeth,
       however described; . . . [or]                     Only a few weeks later, Wyeth

                                              9
returned to District Court once again to                    that he will not introduce at
address Clark.        Reviewing Clark’s                     the trial any reference to
amended trial exhibit list, the District                    Wyeth’s size, financial
Court observed that it demonstrated                         condition, or worth. He
“counsel’s motive to infect the trial with                  must also include as part of
improper bad conduct evidence concerning                    his statement his trial
Wyeth.” In re Diet Drugs Prods. Liab.                       exhibits, witness list, and
Litig., No. 99-20593, Memorandum and                        points for charge . . . .
Pretrial Order No. 2717 at 3 (E.D. Pa. filed
                                                    Id. at ¶ 2.
January 29, 2003) (hereinafter “PTO
2717”).       At the same time—and                          Back in Texas, the trial judge in the
significantly—the District Court quoted             Clark case held an extensive pretrial
the state trial judge, who expressed his            conference. On February 5, 2003, State
commitment to assure “‘a fair verdict that          District Judge Dennis Powell issued an
is an approximation of the damages and              extensive thirteen-page pretrial order.
not a result of them [the jury] being               Judge Powell’s carefully reasoned and
incensed.’” Id. at 4. The District Court            written opinion exhibited understanding of
concluded that counsel Fleming had                  the effect of the settlement preclusion and
merely withdrawn certain submissions and            a determination to honor it. The State
substituted others in an effort to                  District Judge perceptively observed that
circumvent the prior injunctions.                   “not surprisingly, the plaintiff wants to try
                                                    the case in a manner that will maximize
       The District Court held Fleming in
                                                    the chances of a significant recovery, and,
civil contempt and issued an order, PTO
                                                    not surprisingly, the defendant wants to try
2717, enjoining Clark and her counsel
                                                    the case in a manner that will minimize the
from commencing the state trial until
                                                    chances of a significant recovery.” Joint
Fleming submitted, and the Court
                                                    App. 1281. Accordingly, the state court
approved, a statement under oath that he
                                                    flatly prohibited evidence relevant only to
would obey PTO 2625.           The order
                                                    punitive or exemplary damages and
provided:
                                                    evidence relevant to other issues but
       That statement must declare                  unduly prejudicial or misleading. At the
       that with respect to Wyeth’s                 same time, Judge Powell said he would
       conduct he will not inject
                                                            not require the plaintiff to
       into the case any evidence,
                                                            “try the case in a vacuum of
       statement, or argument,
                                                            the defendant’s design,”
       directly or indirectly, that
                                                            which could result in the
       connotes more than simple
                                                            jury improperly speculating
       negligence or defective
                                                            about liability issues and
       design without fault. The
                                                            evidence (or the lack
       statement must also declare

                                               10
       thereof) and factoring such                       concession] contains no
       speculations into causation                       finding that the injury was
       issues      or   damage                           fores eeab le by the
       evaluations.                                      defendant, or that the injury
                                                         was foreseeable from the
Id. at 1282.
                                                         def e ctively designed
       A good deal of the state pretrial                 product. The law requires
order is devoted to analyzing Wyeth’s                    proof, the plaintiff pleaded
purported willingness to stipulate or                    it, the defendant refused to
concede certain issues so as to remove                   admit it was conceded, but
them from the case. This offer—which                     then the defendant does not
was brandished by Wyeth before the                       want the plaintiff to put on
federal District Court during the Fleming                evidence on that element.
contempt proceeding that led to PTO
                                                  Id. at 1288-89.
2717—presumably would have eliminated
any proper incentive for Clark to offer                  The state trial court noted an
inflammatory evidence as part of a                additional problem: the proposed
negligence or design case. But the State          concessions would place the court in a
Distric t J udge, armed w ith his                 dilemma. If certain issues were taken
understandably greater familiarity with           from the case with no actual admission by
Texas tort law, found Wyeth’s apparent            Wyeth, it would require the court to
concessions to be less than they appeared.        instruct the jury that defendant would be
As he pointed out, the proposed                   automatically liable if the plaintiff’s injury
concessions, which would supposedly               were caused by Wyeth’s drug, without
leave only causation and damages in the           regard to fault. But this is a matter that
case, would actually do no such thing. In         could affect jury voir dire, Judge Powell
the words of Judge Powell:                        explained, and might require striking
                                                  potential jurors who could not return a
       Likewise the defendant
                                                  verdict on damages without “considering
       created the im pression
                                                  whether absolute liability law was fair or
       before [U.S. District] Judge
                                                  not.” Id. at 1290.
       Bartle that “they [Wyeth]
       also admitted that the injury                      For these reasons, Judge Powell
       was foreseeable,” and that                 declined to accept Wyeth’s concessions in
       “the injury is foreseeable                 their tendered form, although he remained
       f r o m t h e d e f e c t iv e l y         open to a stipulation of outright admission
       designed product.”                         on one or more of the elements of any
       Nonetheless, contrary to the               cause of action. “No doubt some evidence
       representations to both                    that would be relevant to liability would
       c o u r t s , the [proposed                also be relevant to causation, but this

                                             11
submission would greatly simplify the              memorandum to eliminate the phrase “the
evidence . . . .” Id. at 1291.                     public is increasingly concerned and afraid
                                                   of the drug.” In re Diet Drugs Prods. Liab.
        Evidently, the parties found this
                                                   Litig., No. 20593, Memorandum and
invitation unappealing, and the action
                                                   Pretrial Order No. 2828 (E.D. Pa. filed
moved again to federal court in
                                                   April 8, 2003) (hereinafter “PTO 2828”).
Philadelphia. In March of 2003, the
District Court conducted a lengthy                        Second, the order bars Clark and
conference and reviewed and ruled on               her attorneys from “introducing any
voluminous deposition excerpts and                 evidence, making any statement before or
proposed trial exhibits to determine               argument to the court or jury, related
whether the settlement agreement barred            directly or indirectly to”:
Clark from offering them into evidence at
                                                          [1] punitive, exemplary or
trial. The District Court entered an order
                                                          multiple damages, however
that enforces a series of prophylactic
                                                          described;
prohibitions against introducing evidence
deemed relevant only to punitive damages                  [2] malicious, wanton or
or unfairly prejudicial when balanced                     other similar conduct of
against probative value.                                  Wyeth, however described;
                                                          ...
        First, the order forbids plaintiffs
from offering into evidence a list of                     [3] any medical condition of
specific exhibits and deposition testimony.               plaintiff caused by Wyeth
And, except as specifically allowed by the                other than left-sided mitral
accompanying memorandum, it prohibits                     valve regurgitation or
counsel from “making any statement or                     pulmo nary hypertension
argument to the court or jury related                     secondary to mitral valve
directly or indirectly” to the forbidden                  regurgitation;
evidence. The District Court ruled, for
                                                          ....
example, that Clark (1) could attack the
credibility of certain medical review                     [4] Wyeth’s profits, size or
articles by proving they were funded by                   financial condition;
Wyeth, but not by showing that they were
                                                          [5] the amount or size of
actually ghostwritten at the behest of
                                                          Wyeth’s sales of diet drugs
Wyeth; (2) could not offer any evidence of
                                                          or other products;
concealment of information or destruction
of documents; (3) must redact portions of                 [6] Wyeth’s marketing or
documents suggesting problems with                        promotion of diet drugs to
Wyeth’s diligence in reporting serious                    the extent that Wyeth placed
side-effects of the drugs to the FDA; and                 marketing or promotion
(4) must redact an internal Wyeth                         ahead of health or safety

                                              12
       concerns;                                    plaintiff James in her case in Mississippi
                                                    state court. Appellants timely appealed
       [7] any deception or any
                                                    PTO 2680 (Smart), PTO 2828 (Clark), and
       des t r u ct i o n , hidin g,
                                                    PTO 2883 (James).
       overwriting, or deliberate
       miscoding of documents or                           In October of 2003, while those
       information by Wyeth;                        appeals were pending, Wyeth returned to
                                                    federal court seeking an injunction against
       [8] any involvement by
                                                    other intermediate opt-outs—including
       Wyeth in the ghostwriting of
                                                    Linda Eichmiller, also represented by
       articles;
                                                    Fleming & Associates—pursuing claims in
       [9] primary       pulmonary                  Georgia and Mississippi state courts.
       hypertension;                                Wyeth argued that counsel from Fleming
                                                    & Associates were seeking to introduce
       [10] neurotoxicity; and
                                                    evidence in violation of PTO 2828 even
       [11] any other disease,                      though they had agreed to comply with
       illness or condition or                      PTO 2828 in other cases pending our
       persons suffering from any                   review of the order on appeal.
       other disease, illness or
                                                           Wyeth asserted that counsel sought
       condition caused by Redux
                                                    to intr o d u c e evide nce re gard ing
       or Pondimin except for left-
                                                    PPH—specifically, a label for Pondimin
       sided valvular heart disease
                                                    noting that some users had suffered from
       or pulmonary hypertension
                                                    PPH and a “black box warning” regarding
       second ary to left-sided
                                                    PPH that the FDA was considering in
       valvular heart disease.
                                                    connection with the approval of
Id. at 1-3 (emphasis added). So, for                Redux—even though plaintiffs were only
example, the District Court allowed Clark           claiming they suffered from VHD. The
to prove that relevant warnings were                District Court entered an injunction similar
inadequate or wrong but said Clark “may             to PTO 2828, Pretrial Order 3088 (“PTO
not prove or argue that any such failure            3088”), and explicitly barred plaintiffs
was deliberate or intentional.” Id. at 9.           from seeking to introduce the PPH
                                                    evidence at trial.
       The District Court vacated its
previous orders, PTO 2625 and PTO 2717,                    Plaintiffs timely appealed PTO
in light of the more recent and                     3088, and it was consolidated by orders of
comprehensive PTO 2828. And, on June                this Court with the other appeals from the
10, 2003, the District Court issued Pretrial        District Court’s earlier similar orders. We
Order 2883 (“PTO 2883”), which                      have jurisdiction under 28 U.S.C. §
essentially incorporated the restrictions of        1292(a)(1).
PTO 2828 and enforced them against
                                                                        II.

                                               13
       A distasteful picture of the state           the District Court’s orders for three
court litigation emerges, displaying what           primary reasons. First, they argue that the
some might consider the excesses of our             orders run afoul of the Anti-Injunction Act
adversary justice system. Each side sought          and All Writs Act. Second, they contend
to manipulate the settlement agreement in           that the Younger abstention doctrine
order to optimize its advantage. Wyeth’s            required the District Court to refrain from
counsel resisted admitting, and sought to           enjoining the state court proceedings.
exclude, evidence that tended to support            Finally, appellants argue that the orders
any liability by Wyeth. Plaintiffs’ counsel,        contravene the terms of the settlement
notably Fleming, repeatedly skirted the             agreement, are unmanageable, and run
settlement and the District Court’s orders,         afoul of principles of federalism and
plainly seeking to inject prejudicial matter        comity.
into the state court cases, including
                                                            “The standard of review for the
information about Wyeth’s profits and
                                                    authority to issue an injunction under the
sales that was clearly irrelevant to
                                                    Anti-Injunction Act and the All-Writs Act
negligence liabi lity, causation , or
                                                    is de novo.” In re Prudential Ins. Co. of
compensatory damages, and that could
                                                    Am. Sales Practices Litig., 261 F.3d 355,
only be relevant to obtaining punitive
                                                    363 (3d Cir. 2001) (internal citations
damages.
                                                    omitted) (hereinafter Prudential I). When
       The District Court properly                  reviewing a district court’s decision
observed that, were plaintiffs’ counsel             whether to abstain, “the underlying legal
permitted to flout the limits of the                questions are subject to plenary review,
settlement, the                                     but the decision to abstain is reviewed for
                                                    an abuse of discretion.” Grode v. M ut.
       floodgates will be open and
                                                    Fire, Marine & Inland Ins. Co., 8 F.3d 953,
       the prohibition against
                                                    957 (3d Cir. 1993). “We review the terms
       punitive damages in the
                                                    of an injunction for an abuse of discretion,
       court approved Settlement
                                                    underlying questions of law receive de
       Agreement will be nothing
                                                    novo review, and factual determinations
       but a dead letter, with
                                                    are reviewed for clear error.” Prudential I,
       potentially             dire
261 F.3d at 363. Finally, we apply plenary
       c o n s e q u ence s for th e
                                                    review to a district court’s construction of
       settlement as a whole.
                                                    a settlement agreement, but we review a
PTO 2717. Faced with this prospect, the             district court’s interpretation of a
District Court entered the injunctions at           settlement agreement for clear error.
issue in this appeal in order to protect the        Coltec Indus., Inc. v. Hobgood, 280 F.3d
settlement against guerrilla warfare from           262, 269 (3d Cir. 2002) (citing In re
the opt-out lawyers.                                Cendant Corp. Prides Litig., 233 F.3d 188,
       Appellants now urge us to vacate

                                               14
193 (3d Cir. 2000)).5                                  by loose statutory construction.’” Chick
                                                       Kam Choo v. Exxon Corp., 486 U.S. 140,
                      A.
                                                       146 (1988) (quoting Atl. Coast Line R.R.
        The All Writs Act empowers                     v. Bhd. Of Locomotive Eng’rs, 398 U.S.
district courts to “issue all writs necessary          281, 287 (1970)).
or appropriate in aid of their respective
                                                               The “protect or effectuate its
jurisdictions and agreeable to the usages
                                                       judgments” exception, known as the
and principles of law.” 28 U.S.C. § 1651.
                                                       “relitigation exception,” is “founded in the
The authority the All Writs Act imparts to
                                                       well-recognized concepts of res judicata
district courts is limited, however, by the
                                                       and collateral estoppel.” Id. at 147. “The
Anti-Injunction Act, which prohibits
                                                       relitigation exception was designed to
injunctions “to stay proceedings in a State
                                                       permit a federal court to prevent state
court except as expressly authorized by
                                                       litigation of an issue that previously was
Act of Congress, or where necessary in aid
                                                       presented to and decided by the federal
of its jurisdiction, or to protect or
                                                       court.” Id.
effectuate its judgments.” 28 U.S.C. §
2283.                                                          We approved an injunction against
                                                       state court proceedings under the
         The two statutes act in concert, and
                                                       relitigation exception in Prudential I. That
“[i]f an injunction falls within one of [the
                                                       case arose from the class settlement of
Anti-Injunction Act’s] three exceptions,
                                                       claims brought by Prudential policyholders
the All-Writs Act provides the positive
                                                       arising from allegedly fraudulent sales
authority for federal courts to issue
                                                       practices. Class members were free to
injunctions of state court proceedings.” In
                                                       choose settlement for some policies and
re Gen. Motors Corp. Pick-Up Truck Fuel
                                                       not for others. The notice of settlement
Tank Prods. Liab. Litig., 134 F.3d 133,
                                                       specifically advised each potential class
143 (3d Cir. 1998); see also Carlough, 10
                                                       member, however, that acceptance of the
F.3d at 201 n.9. The pretrial injunctions at
                                                       settlement would prevent any future
issue here were not expressly authorized
                                                       assertion of claims that had been or could
by statute, so they may be justified only
                                                       have been asserted with respect to any
under the Anti-Injunction Act’s “in aid of
                                                       policy for which the class member chose
its jurisdiction” or “protect or effectuate its
                                                       to settle.
judgments” exceptions. These exceptions
“are narrow and are ‘not [to] be enlarged                     Two class members accepted the
                                                       settlement for several policies but opted
                                                       out for two others. They then brought a
       5
          We discussed at length the                   Florida state action to recover on the two
distinction between contract construction              excluded policies, basing their claims in
and contract interpretation in Ram Constr.             part on facts that also supported claims
Co. v. Am. States Ins. Co., 749 F.2d 1049,             arising from settled policies. In effect,
1053 (3d Cir. 1984).

                                                  15
plaintiffs sought to undermine          the         the “in aid of jurisdiction” exception.
settlement’s claim preclusion order.
                                                            “[A]n injunction is necessary in aid
        The District Court enjoined the             of a court’s jurisdiction only if ‘some
plaintiffs in the Florida action from “using        federal injunctive relief may be necessary
evidence common to the purchase and                 to prevent a state court from so interfering
sale” of the settled policies. 261 F.3d at          with a federal court’s consideration or
368.     The injunction effectuated the             disposition of a case as to seriously impair
settlement agreement’s bar against new              the federal court’s flexibility and authority
claims based on “facts and circumstances            to decide that case.’” Diet Drugs I, 282
underlying” the claims that had been                F.3d at 234 (quoting Atl. Coast Line R.R.,
settled and released. Id. at 361. The order 398 U.S. at 294). One instance where we
was designed to prevent new claims that             have determined that a federal court may
were based in whole or part on settled and          enjoin state court proceedings to protect its
released claims.       The straightforward          jurisdiction is when a federal court is
injunction language mirrored the familiar           “entertaining complex litigation, especially
rules of claim and issue preclusion that are        when it involves a substantial class of
often applied by courts.                            persons from multiple states, or represents
                                                    a consolidation of cases from multiple
       This case differs from Prudential I,
                                                    districts.” Id. at 235 (citing Carlough, 10
because under the settlement agreement
                                                    F.3d at 202-04); see also In re Gen.
opt-outs’ settled claims do not go to
                                                    Motors, 134 F.3d at 145.
judgment; rather, their claims proceed in
state courts with limits on the type of                    Here, as in Prudential II, the
damages they can seek. Thus the District            District Court retained “continuing and
Court had to enforce a damages                      exclusive jurisdiction . . . to administer,
preclusion, not a claim preclusion. This            supervise, interpret and enforce the
was obviously more complicated because              Settlement in accordance with its terms.”
permitted claims could give rise to both            Joint App. 398. In Prudential II, we
allowable compensatory damages and                  explained:
forbidden punitive damages.
                                                           The     settlem ent     here
       Consequently, the concepts of issue                 represented a herculean
and claim preclusion are not entirely                      effort to provide a fair and
apposite here. We need not determine                       consistent framework for the
whether the District Court had the                         resolution of millions of
authority to effectuate the settlement                     claims. The comprehensive
agreement’s punitive damages provision                     procedures implemented for
under the Anti-Injunction Act’s relitigation               this purpose were integral to
exception, however, because in any case it                 this effort.      Permitting
had the power to issue the injunction under                continued litigation of these

                                               16
       claims would “unsettle”                      4226, at 551 (2d ed. 1995). 6
       what had been thought to be
                                                                        B.
       settled, and would disrupt
       carefully construc ted                              Any court determining whether to
       procedures for individual                    issue an injunction must consider several
       dispu te resolution.                         factors that guide and constrain its
       Allowing comprehensive
       s et tl em ents    to   be
       undermined in this way                              6
                                                              Appellants raise the issue of
       would undeniably deter
                                                    Younger abstention, the prudential
       similar settlements in the
                                                    corollary to the Anti-Injunction Act’s
       future.
                                                    statutory circumscription of federal courts’
314 F.3d at 105; see also United States v.          ability to enjoin state court proceedings,
Alpine Land & Reservoir Co., 174 F.3d               see Younger v. Harris, 401 U.S. 37 (1971),
1007, 1015 (9th Cir. 1999) (finding that            but we need address it only briefly.
the “in aid of its jurisdiction” exception          Although Younger’s application to civil
applies when district court retains                 proceedings between two private parties
jurisdiction over a settlement agreement).          remains relatively unclear, a consistent
                                                    prerequisite is that “an important state
        As we have described above, the
                                                    interest is implicated.” See Anthony v.
punitive damages release is a central pillar
                                                    Council, 316 F.3d 412, 418 (3d Cir. 2003).
of the settlement agreement. Allowing
                                                     We discern nothing about the state civil
state court actions to run afoul of that
                                                    proceedings at issue here—personal injury
provision would fatally subvert it and
                                                    suits sounding largely in state tort
render the agreement (and the Court’s
                                                    law—that can fairly be thought to
jurisdiction) nugatory.      The District
                                                    implicate “important state interests.” The
Court’s ability to give effect to that
                                                    instances where the Supreme Court and
provision is necessary in aid of its
                                                    this Court have applied Younger to state
jurisdiction.
                                                    civil proceedings—such as state contempt
        Yet “the fact that an injunction may        proceedings, Juidice v. Vail, 430 U.S. 327
issue under the Anti-Injunction Act does            (1977); judicial proceedings enforcing
not mean that it must issue.” Chick Kam             state court orders, Pennzoil Co. v. Texaco,
Choo, 486 U.S. at 151. Specifically,                Inc., 481 U.S. 1 (1987); and child support
principles of comity, federalism, and               contempt proceedings, Anthony, 316 F.3d
equity always restrain federal courts’              at 421—involved proceedings qualitatively
ability to enjoin state court proceedings.          different from those at issue here. This
See Mitchum v. Foster, 407 U.S. 225, 243            much was inherent in our decision in
(1972); 17 Charles A. Wright & Arthur R.            Prudential I and Prudential II, where we
Miller, Federal Practice and Procedure §            upheld orders enjoining state tort
                                                    proceedings.

                                               17
equitable authority. See Temple Univ. v.                  of its remedy in order to fit
White, 941 F.2d 201, 214-15 (3d Cir.                      the nature of the violation
1991); Shields v. Zuccarini, 254 F.3d 476,                which it has found.
482 (3d Cir. 2001).           Of primary
941 F.2d at 215. The proper tailoring of
importance, a party seeking an injunction
                                                   injunctive relief is especially important
must show that there is some legal
                                                   when principles of federalism are
transgression that an injunction would
                                                   involved. See Rizzo, 423 U.S. at 371
remedy.7
                                                   (“[A]ppropriate consideration must be
        In addition, any injunction a court        given to principles of federalism in
issues must be commensurate with the               determining the availability and scope of
wrong it is crafted to remedy—it is a              equitable relief.”).      In other words,
“settled rule that in federal equity cases         “federal courts should always seek to
‘the nature of the violation determines the        minimize interference with legitimate state
scope of the remedy.’” Rizzo, 423 U.S. at          activities in tailoring remedies.” Stone v.
378 (quoting Swann v. Charlotte-                   City and County of San Francisco, 968
Mecklenburg Bd. of Educ., 402 U.S. 1 , 16 F.2d 850, 861 (9th Cir. 1992).
(1971)); see also Forschner Group, Inc. v.
                                                           Here, the putative transgression that
Arrow Trading Co., 124 F.3d 402, 406 (2d
                                                   Wyeth sought to remedy through an
Cir. 1997) (“It is well-settled that the
                                                   injunction was appellants’ violation of the
essence of equity jurisdiction has been the
                                                   settlement agreem ent.          Thus, two
power to grant relief no broader than
                                                   interrelated considerations guide our
necessary to cure the effects of the harm
                                                   review: (1) the proper construction of the
caused by the violation”). As this Court
                                                   settlement agreement’s punitive damages
stated in Temple Univ. v. White,
                                                   provision; and (2) the scope of the District
       While the scope of a district               Court’s injunctions. In other words, we
       court's equitable powers to                 must construe the settlement agreement
       effect a remedy is broad, the               and then determine the extent to which the
       relief which a district court               District Court’s injunctions prohibited
       may grant can be no broader                 actions that contravened the terms of the
       than that necessary to                      settlement. An over-inclusive injunction
       corre c t the vio lation.                   would run afoul of well-established
       Indeed, a federal court is                  principles of equity and federalism.
       required to tailor the scope
                                                                        1.
                                                          The decision of a potential
       7                                           settlement class member to remain with
        Put differently, a party seeking a
                                                   the class or to opt out entirely at the
permanent injunction must “succeed on
                                                   threshold is a fateful one. The average
the merits.” See, e.g., Temple Univ., 941
                                                   class member has had no hand in
F.2d at 215.

                                              18
negotiating the terms of the settlement. As          informed putative class members of the
demonstrated in Prudential I, the                    consequences if they signed onto the class
settlement’s preclusive effect may be                and exercised intermediate opt-out rights:
broad and strict. By waiving an initial opt-
                                                            If you exercise the
out, the class member surrenders what may
                                                            Intermediate Opt-Out right,
be valuable rights, in return for
                                                            you give up the right to
countervailing benefits. In this case,
                                                            receive further benefits
important information for these potential
                                                            u n d e r t h e S e t t l e m e nt
class members included the availability,
                                                            Agreement, but you may
benefits, and disadvan tage of the
                                                            choose to pursue in court
intermediate opt-out right.
                                                            any legal claims you may
        This opt-out choice raises a                        ha ve again st [ W ye th]
significant issue of fairness.     As in                    relating to your use of
Georgine v. Amchem Prods., the                              Pondimin and/or Redux.
individual class members here have claims                   However, it is important to
“that frequently receive huge awards in the                 understand that if you
tort system.” 83 F.3d at 633. They can                      exercise the Intermediate
hardly knowingly waive some of their tort                   Opt-Out right, and choose
rights without a clear notice of what they                  to bring a lawsuit against
are waiving.      They may be entirely                      [Wyeth], your lawsuit will
dependent on the class notice for this                      be subject to certain
information. That is why we paid careful                    restrictions including the
attention to the language of the class                      following:
notice, which detailed the extent of the
                                                            ! If you exercise your
released claims, in upholding the
                                                            Intermediate Opt-Out right
injunction that enforced the preclusive
                                                            and choose to bring a
provisions of the settlement in Prudential
                                                            lawsuit against [Wyeth], you
I. 261 F.3d at 366-67.
                                                            may not seek punitive or
        It follows that the preclusion                      multiple damages.
language in the Diet Drugs class notice
                                                            ! If you exercise your
and settlement agreement must, in order to
                                                            Intermediate Opt-Out right
avoid due process concerns, be strictly
                                                            and choose to bring a
construed against those who seek to
                                                            lawsuit against [Wyeth], you
restrict class members from pursuing
                                                            may only assert a legal
individual claims. Cf. United States v.
                                                            claim based on the heart
Albertini, 472 U.S. 675, 680 (1985)
                                                            valve condition of the
(“Statutes should be construed to avoid
                                                            r e l e v an t D i e t Dru g
constitutional questions . . . .”). Here, the
                                                            Recipient that was [properly
following language in the class notice

                                                19
      diagnosed within            a                     [Wyeth and other released
      prescribed time period].                          parties], but may only assert
                                                        a claim . . . based on the
      ! If you exercise your
                                                        heart valve of the relevant
      Intermediate Opt-Out right
                                                        Diet Drug Recipient which
      and choose to bring a
                                                        w a s di ag no se d b y a
      lawsuit against [Wyeth],
                                                        Qualified Physician as FDA
      both you and [Wyeth] will
                                                        Positive          by     an
      be subject to certain
                                                        Echocardiogram . . . .
      additional restrictions that
      are desc ribed in the                             [2] With respect to [any
      Settlement Agreement. In                          intermediate opt-out] who
      order for [Wyeth] to be                           initiates a lawsuit against
      subject to these restrictions,                    any of the Released Parties
      such as waiver of any statute                     within one year from the
      of limitations defense, you                       date on w hich th e
      must bring your lawsuit, if                       Intermediate Opt-Out right
      you choose to do so, within                       is exercised, [W yeth] shall
      one (1) year from the date                        not assert any defense based
      on which you exercise your                        on any statute of limitations
      Intermediate Opt-Out right.                       or repose, the doctrine of
                                                        laches, any other defense
Wyeth Br., Ex. A at 12.             The
                                                        predicated on the failure to
corresponding preclusive language in the
                                                        timely pursue the claim, any
settlement agreemen t regard in g
                                                        defense based on “splitting”
intermediate opt-outs appeared in three
portions:
      [1] [An intermediate opt-                         unfair business practices,
      out] may pursue all of his or                     deceptive trade practices,
      her Settled Claims (except                        Unfair and Deceptive Acts
      for those claims set forth in                     and Practices (“UDAP”),
      subparagraphs (e) and (g) of                      and other similar claims
      Section I.53 8 ), against                         whether arising under
                                                        statute, regulation, or
                                                        judicial decision;
      8
        Subparagraphs (e) and (g) of                    ...
Section I.53 include, as part of the                    g. medical screening and
definition of “Settled Claims,” all claims              monitoring, injunctive and
for damages or any other remedies for:                  declaratory relief[.]

      e. consumer fraud, refunds,                 Joint App. 572.

                                             20
a cause of action, any                         of Section VII.F.3.9
defense based on any release
                                        Joint App. 615-17.
signed pursuant to the
S e t tlement A g r e e m ent,                 Three restrictions emerge. First, the
and/or any other defense                potential class members were told that
based on the existence of the           intermediate opt-outs will be allowed to
S e ttlement A g r ee m en t,           “pursue all . . . Settled Claims” for timely
e x cept to the extent                  diagnosed VHD , except for those
provided          herein.               pertaining to consumer fraud or business
[Intermediate opt-outs] may
n o t s e e k p u n i ti v e,
exemplary, or any multiple                     9
                                                   Section VIII.F.3 provides:
damages against [Wyeth or
other released parties] . . . .
                                               The Parties to the
[3] [Intermediate opt-outs]                    Settlement . . . shall not seek
may not use any previous                       to introduce and/or offer the
v erdicts o r j ud g m ents                    terms of the Settlement
against [Wyeth], or factual                    Agreement, any statement,
findings necessary to such                     transaction or proceeding in
verdicts or judgments, for                     connectio n with th e
purposes of establishing                       negotiation, execution or
claims or facts in order to                    implementation of this
obtain a verdict or judgment                   Settlement Agreement, any
against [Wyeth] under the                      statements in the notice
doctrines of res judicata,                     documents appended to this
collateral estoppel or other                   Settlement Agreement,
doctrines of claim or issue                    stipulations, agreements, or
preclusion.          Nor may                   admissions made or entered
[intermediate opt-outs] seek                   into in connection with the
to introduce into evidence                     fairness hearing or any
against [Wyeth], for any                       finding of fact or conclusion
purpose, such a verdict,                       of law made by the Trial
judgment, or factual finding.                  Court, or otherwise rely on
L a w s u its in i t ia t e d by               the terms of this Settlement,
[intermediate opt-outs] shall                  in any judicial proceeding,
be subject to the provisions                   except insofar as it is
                                               necessary to enforce the
                                               terms of the Settlement.

                                        Joint App. 704.

                                   21
loss. Specifically included are claims for          expressly forbidden were sought.
such open-textured injuries as mental
                                                            Significa nt ly,      e v i d e n ti a ry
anguish, pain and suffering, and loss of
                                                    restrictions are explicitly addressed in the
consortium. Second, Wyeth agreed not to
                                                    relevant provision of the agreement. The
assert any defenses based on class
                                                    agreement forbids prior adverse findings
members’ failure to assert a timely claim
                                                    or judgments against Wyeth from being
and class members “may not seek punitive,
                                                    placed in evidence for any purpose, as well
exemplary, or any multiple damages.”
                                                    as a wide range of evidence regarding the
Finally, the provision addressed certain
                                                    settlement agreement itself. This implies
evidentiary restrictions: (1) intermediate
                                                    to the reader of the agreement that the
opt-outs may not “seek to introduce into
                                                    drafters knew how to identify evidence
evidence” earlier verdicts or judgments
                                                    restrictions when they wished to do so.
against Wyeth, or the factual findings
                                                    There is no restriction, however, placed on
underlying them; and (2) neither party can
                                                    the use of evidence simply because it
offer evidence regarding the settlement
                                                    would be relevant in supporting punitive
agreement, including evidence regarding
                                                    damages. One deduces from the absence
its negotiation or implementation.
                                                    of such an evidentiary restriction that the
        The plain language is telling. The          agreement meant only to block the
interm ediate opt-out p rovisio n                   specified type of damages award and not
comprehensively promised that claims for            types of evidence that are relevant to
a wide variety of losses can be sought, so          permissible awards but might also be
long as they are for FDA-positive VHD.              relevant to punitive damages.
There is no limitation on VHD-related
                                                           Appellees seek to rebut this
claims or causes of action. Moreover,
                                                    language by referring to colloquy during
there is no expression that opportunities to
                                                    the fairness proceedings that they claim
recover for mental anguish, pain, or loss of
                                                    further refines the meaning of the punitive
consortium will be impeded or hampered.
                                                    damages preclusion. At an October 2002
If the drafters were concerned these type
                                                    status hearing, one negotiator stated his
of recoveries might become vehicles for
                                                    understanding that
sub rosa punitive awards, they might have
limited them; they did not.                                 the essence of this bargain
                                                            was that there would be no
       Instead, the authors of the
                                                            punitive damages in these
settlement specifically excluded only
                                                            downstream opt out cases
“punitive, multiple, and exemplary
                                                            and that does not simply
damages” from the laundry list of
                                                            mean no punitive damages.
allowable recoveries. This reinforces the
                                                            What [W ye th ] w as
natural conclusion that claims for VHD
                                                            bargaining for, clearly, they
were not restricted by the settlement, so
                                                            were saying . . . we were
long as forms of damages other than those

                                               22
       willing to pay for what                             from any and all causes of
       juries dete rmine were                              actions, claims, damages,
       caused by our diet drugs                            e q u i t a b l e, l e g a l a n d
       without reference to some                           a d m in i s tr a t iv e r e l i e f ,
       additional element that is                          interest, demands or rights,
       awarded by reference to                             of any kind or nature
       fault evidence.                                     whatsoever . . . that have
                                                           been, could have been, may
Joint App. 2149. This might be pertinent
                                                           be or could be alleged or
in construing the agreement as between
                                                           asserted now or in the future
parties who actually participated in the
                                                           . . . on the basis of,
negotiations. See, e.g., Bohler-Uddeholm
                                                           connected with, arising out
Am., Inc. v. Ellwood Group, Inc., 247 F.3d
                                                           of, or related to, in whole or
79, 114 (3d Cir. 2001). But due process
                                                           in part, the Released
considerations counsel against binding
                                                           Transactions [i.e., settled
absent potential class members to
                                                           policies under the settlement
understandings that were not made express
                                                           agreement].
in the class notice or settlement agreement.
And we are particularly wary of binding 261 F.3d at 367 (emphasis omitted). In
class members through statements made               other words, any cause of action or claim
after the settlement was finalized and after        that was in any way related to a settled
they had to choose whether to opt out.              policy—even a claim that “could have
                                                    been” raised on the basis of such a
       Appellees urge that our decision in
                                                    policy—was barred. This release language
Prudential I disposes of appellants’ claims
                                                    was indeed, as the class notice explicitly
because they read that decision to hold that
                                                    warned potential class members, “intended
“when class members settle and release
                                                    to be very broad.” Id. at 366. And the
some of their claims— but preserve other
                                                    District Court’s injunction in that case
claims from the settlement—that release
                                                    tracked the language of the class notice,
bars the plaintiffs from offering evidence
                                                    forbidding class members from bringing a
relating to the released claims in any
                                                    lawsuit “based on or related to the facts
subsequent trial of the preserved claims.”
                                                    and circumstances underlying the claims
Wyeth Br. 36. But we think that the
                                                    and causes of action” that were settled in
settlement preclusion in Prudential I is
                                                    the class action. Id. at 361. To block new
different from this one, and different in a
                                                    claims “based on facts” underlying other
meaningful way.
                                                    settled claims is simply to effectuate the
       The class notice in Prudential I             class notice language releasing claims that
informed class members that, in return for          “could have been brought” based on the
accepting settlements on some policy                settled transactions. In other words, the
claims, they would release the defendants           release language in the Prudential

                                               23
settlement was typical general release               limitation as if it were a limit on the
language that prevents new causes of                 manner in which opt-out plaintiffs can
action from overlapping with settled                 pursue their claims for compensation.
causes of action with a “common nucleus              Under this view, a plaintiff may show
of operative facts.” Id. at 367.                     unreasonable behavior to recover
                                                     compensation for negligence, unless the
       Contrast the language in the Diet
                                                     behavior was really unreasonable (so that
Drugs release. The Diet Drugs release is
                                                     it might support punitive damages). Put
not structured as a broad claims
                                                     another way, Wyeth urges that very strong
preclusion, but as a bar only to the
                                                     evidence of fault must be diluted so that it
magnitude and type of relief. The only
                                                     would not arouse the jury to award
claims-based limitations are that (1) the
                                                     punitive damages, if punitive damages
claims must be based on a timely
                                                     could be awarded—which they cannot be.
diagnosed VHD injury, and (2) the claim
                                                     In the absence of an explicit description of
may not be for consumer or business
                                                     this novel type of restriction in the
losses.       VH D-base d claims f or
                                                     settlement agreement, we decline to
compensation, including for pain, anguish,
                                                     construe the agreement to imply an
and loss of consortium, are not precluded
                                                     evide nc e -dilution r e quirement for
or limited in any way. Indeed, the
                                                     compensation claims that are clearly
settlement agreement specifically contains
                                                     preserved for the opt-out plaintiffs.
Wyeth’s renunciation of any defense based
on “‘splitting’ a cause of action.” What is                              2.
limited is the type and extent of damages
                                                            All of this is not to say that the
for such VHD-claims.
                                                     District Court was powerless to restrain
        If we were to accept Wyeth’s                 opt-out plaintiffs from evading the
invitation to read this damages limitation           prohibition against exemplary damages.
as if it were a broad Prudential-type                Even under a strict construction of the
release of all claims that could be the basis        settlement agreement, the District Court
for a punitive damages award, we would               was entitled to prevent circumvention of
face an anomaly. Since the predicate to              the damages limitation. The District Court
any punitive or multiple damages award is            acted consistently with the settlement
a finding of tortious liability, Wyeth’s             agreement, for example, when it enjoined
logic would foreclose opt-out plaintiffs             the introduction of certain types of
from proving liability at all.          That         evidence releva nt on ly to the
interpretation would make the settlement             impermissible purpose of obtaining
agreement internally contradictory.                  punitive damages. Appellants conceded
                                                     this at oral argument. Tr. 9. So, as
       Of course, Wyeth does not press so
                                                     appellants acknowledged, the District
absurd a contention. But, in effect, Wyeth
                                                     Court correctly banned evidence relating
wants us to read this punitive damages
                                                     to Wyeth’s size, profits, and sales figures,

                                                24
which is not probative of liability,               intentional—would be probative of a
causation, or compensation. Id. at 10, 13.         failure to warn.      And intentional or
                                                   reckless behavior is often relevant to
        But PTO 2828 swept far more
                                                   showing conduct below the reasonable
broadly, prohibiting Clark from offering
                                                   standard of care necessary to make out a
evidence that was relevant—indeed, highly
                                                   case of negligence.11
probative—on issues of negligence and
failure to warn.10 The District Court
reasoned that such evidence, if suggestive
                                                          11
as well of intentional misconduct, fell                      Certain categories of intentional
within the punitive damages bar because it         conduct—specifically, intentionally
could support a punitive verdict or because        tortious conduct—do not support a claim
it could inflame the state jury. The test          of negligence in certain jurisdictions.
that the District Court seemed to employ           Compare Dairy Road Partners v. Island
was to place “off-limits” evidence that was        Ins. Co., 992 P.2d 93, 114-15 (Haw.
not “necessary” to prove a claim to                2000), Ins. Co. of N. Am. v. Miller, 765
compensation. PTO 2828, at 8. Excluded             A.2d 587, 601 (Md. 2001), and Jamison v.
under this approach were pieces of                 Encarnacion, 281 U.S. 635, 641 (1930)
evidence that “suggest malfeasance on the          with Landry v. Leonard N. East Ins. Co.,
part of the company that goes beyond mere          720 A.2d 907, 910 (Me. 1998), Am. Nat’l
negligence,” id. at 27, or that “connotes          Fire Ins. Co. v. Schuss, 607 A.2d 418, 423
more than negligence.” Id. at 32.                  (Conn. 1992), and Walters v. Blackshear,
                                                   591 N.E.2d 184, 185 (Mass. 1992). The
       Intentional or reckless behavior
                                                   distinguishing factor between intentionally
may be highly probative of elements of
                                                   and negligently tortious conduct is that an
negligence or defective design cases. The
                                                   intentional tortfeasor intends to bring
failure to report adverse actions to the
                                                   about the harm that results from his
FDA— whether accidental or
                                                   actions. See Schuss, 607 A.2d at 423.
                                                   Thus even in those jurisdictions where
                                                   negligence and intentional torts are
       10
         We center our discussion on PTO           mutually exclusive, intentional conduct
2828 because it was the most                       may be relevant to negligence so long as it
comprehensive of the District Court’s              does not involve intent to bring about the
orders and appears to have established a           harmful result. See Landry, 720 A.2d at
baseline set of guidelines for all                 910; Fowler V. Harper et al., The Law of
intermediate opt-outs litigating their             Torts § 16.9 n.2 (“An intentional act may
claims in state courts, regardless of              be negligent.”) (citing Dartez v. Gadbois,
whether they were parties to PTO 2828.             541 S.W.2d 502 (Tex. Civ. App. 1976));
Counsel for Eichmiller et al., for example,        see also Ghassemieh v. Schafer, 447 A.2d
agreed to comply with PTO 2828 even                84, 89-90 (Md. Ct. Spec. App. 1982)
though it did not specifically bind them.          (“We see no reason why an intentional act

                                              25
      A few examples suffice to illustrate        the problem. The District Court correctly
                                                  recognized that the use and content of a
                                                  “black box” on the drug warning label
that produces unintended consequences
                                                  “goes to the issue of failure to warn.” Id. at
cannot be a foundation for a negligence
                                                  8. Accordingly, it authorized Clark to seek
action.”); see also 57A Am. Jur. 2d
                                                  to prove that warnings were “inadequate or
Negligence § 30 (2004). As one major
                                                  wrong and th at certain relevant
treatise explains:
                                                  information was not reported or not
                                                  reported on a timely basis to the FDA.” Id.
      [I]ntentional conduct and
                                                  at 9. But the Court held that to avoid
      even intentional risk-taking
                                                  “implicat[ing]” punitive damages, Clark
      i s a n a l yz ed u n d e r
                                                  could not prove that any such failure was
      negligence rules unless the
                                                  intentional. As a consequence, the District
      defendant has a purpose to
                                                  Court struck deposition testimony from
      invade the plaintiff’s
                                                  Wyeth’s Associate Director of Safety
      interests or a certainty that
                                                  Surveillance specifically admitting that
      such an invasion will occur.
                                                  valvular heart disease reactions to the
      . . . The defendant who
                                                  drugs were not reported to the FDA. Id. at
      intentionally takes a risk
                                                  33.      The District Court also banned
      may or may not be
                                                  testimony from other witnesses that they
      negligent; negligence will
                                                  fought strenuously against any “black box”
      depend upon the seriousness
                                                  warning. PTO 2828, at 31. This evidence
      of the risk and the reasons
                                                  certainly tended to prove that the
      for taking it.
                                                  defendant “knows or should know of a
      ....
                                                  potential risk of harm presented by a
      In spite of the fact that it is
                                                  product but markets it without adequately
      conduct and risk, not mental
                                                  warning of the danger,” which is the
      state that determines
                                                  definition of a “marketing defect” under
      negligence, the defendant’s
                                                  Texas tort law. See Sims v. Washex Mach.
      state of mind is not
                                                  Corp., 932 S.W.2d 559, 562 (Tex. Ct. App.
      necessarily irrelevant in a
                                                  1995); see also Jackson v. Johns-Manville
      negligence case.          The
                                                  Sales Corp., 750 F.2d 1314, 1318-20 & n.8
      defendant’s knowledge of
                                                  (5 th Cir. 1985) (en banc) (Mississippi law).
      facts that make a given act
                                                  But under PTO 2828, this evidence was
      risky (as distinct from his
                                                  placed out of bounds.
      attitude) is frequently
      important on the negligence                        Similarly, the District Court placed
      issue.                                      off-limits any evidence that mentioned
                                                  medical side-effects other than VHD
Dan B. Dobbs, The Law of Torts § 116
(2001).

                                             26
itself.12 This evidence was not offered to          have no other purpose than to obtain
support claims for these side-effects, since        punitive damages.” Id. at 20. Evidence
plaintiffs did not suffer from them.                tending simply to show that Wyeth wanted
Rather, they were offered for other                 to successfully market the diet drugs and
purposes, such as to prove duty to warn.            make a profit selling them would not be
Evidence of the totality of the risks of            relevant to show, for example, that Wyeth
injury may be admissible under state law            acted negligently. But excessive concern
to show the scope of the duty to warn,              with the image and marketing of the diet
even if the individual plaintiff has not            drugs at the expense of making efforts
sustained all the injuries in question. See         toward determining whether they were
Dartez v. Fibreboard Corp., 765 F.2d 456,           safe could be probative as to whether
468 (5th Cir. 1985). Nevertheless, the              Wyeth breached a duty of care towards the
District Court ruled out testimony about            plaintiffs.
delays in changing warning labels on
                                                            In effect, the District Court trimmed
Pondimin if the warnings concerned PPH.
                                                    evidence that was probative, but that it
The Court justified this ruling on the
                                                    viewed as unnecessary and so inculpatory
ground that plaintiffs did not have these
                                                    that it might inflame the jury to award
side-effects, so that this evidence would
                                                    damages that would punish Wyeth instead
“have the effect of unfairly arousing the
                                                    of simply compensating the plaintiffs. The
jury against Wyeth.” PTO 2828, at 7.
                                                    District Judge effectively adopted the role
       The     D i s t r ic t Court   also          of a trial judge balancing probative value
categorically prohibited plaintiffs from            against unfair prejudice. Cf. Fed. R. Evid.
offering evidence of “Wyeth’s marketing             403. By doing that, he moved beyond
or promotion of diet drugs to the extent            mere enforcement of the damages
that Wyeth placed marketing or promotion            restriction, and affected plaintiff’s right to
ahead of health or safety concerns.” Id. at         try her permissible liability case.
6. The Court took this step on the grounds
                                                           A trial is more than a matter of
that “such evidence and argument can
                                                    presenting a series of individual fact
                                                    questions in arid fashion to a jury. The
       12                                           jury properly weighs fact questions in the
          This ruling was not based on
                                                    context of a coherent picture of the way
claim preclusion. Intermediate opt-outs
                                                    the world works. A verdict is not merely
were limited to recovery for VHD but
                                                    the sum of individual findings, but the
were not barred from recovery for PPH, a
                                                    assembly of those findings into that picture
side-effect that is distinct from VHD . See
                                                    of the truth. As the Supreme Court
Joint App. 572-73, 616; PTO 1415, at 70;
                                                    instructed in Old Chief v. United States,
In re Diet Drugs, No. 99-20953,
                                                    evidence “has force beyond any linear
Memorandum and Pretrial Order No.
                                                    scheme of reasoning, and as its pieces
3065, at 5 (E.D. Pa. filed October 10,
                                                    come togeth er a na rrative gain s
2003).

                                               27
momentum, with power not only to                   a different judge.
support conclusions but to sustain the
                                                          Appellees argue that Clark has no
willingness of jurors to draw the
                                                   cause to complain about losing access to
inferences, whatever they may be,
                                                   some evidence relevant to liability because
necessary to reach an honest verdict.” 519
                                                   she was offered, and declined, Wyeth’s
U.S. 172, 187 (1997). Unduly sterilizing a
                                                   stipulation not to contest the element of
party’s trial presentation can unfairly
                                                   breach of duty. Wyeth Br. 46. Notably,
hamper her ability to shape a compelling
                                                   Wyeth did not offer to concede negligence
and coherent exposition of the facts.
                                                   or defective warning before the jury. It
        Of course, at trial this process of        proposed, instead, a stipulation, in the
evidentiary balancing is nuanced and               form of a conditional double negative, that
contextual. For that reason, “excluding            would present two specific interrogatories
evidence under Fed R. Evid. 403 at the             to the jury—cause in fact and damages.
pretrial stage is an extreme measure.”             Joint App. 3371-72.
Hines v. Consolidated Rail Corp., 926
                                                           This     p a r s im o n i o u s — i n d e e d ,
F.2d 262, 274 (3d Cir. 1991). In In re
                                                   illusory—offer was understandably
Paoli R.R. Yard PCB Litigation, we
                                                   rejected by Clark’s counsel. As State
explained:
                                                   District Judge Powell found, it simply
       [A] court cannot fairly                     misconceived Texas tort law, and would
       ascertain the po tential                    have created confusion for the jury. But
       relevance of evidence for                   beyond that, restricting plaintiff to a sterile
       Rule 403 purposes until it                  concession and the right to litigate two
       has a full record relevant to               particularized questions would seriously
       the putatively objectionable                disadvantage her at trial (as skilled counsel
       evidence. We believe that                   for Wyeth surely recognized). Jurors
       Rule 403 is a trial- oriented               might well wonder at the fairness of
       rule. Precipitous Rule 403                  determining causation and damages in a
       determinations, before the                  vacuum devoid of any suggestion of
       challenging party has had an                liability or negligence. Intermediate opt
       opportunity to develop the                  out plaintiffs never agreed to relinquish
       record, are therefore unfair                their right to try their allowed claims
       and improper.                               effectively in state court.
916 F.2d 829, 859 (3d Cir. 1990) (internal                 Moreover, removing critical issues
citation omitted). In short, the District          of fact from the jury without an adequate
Court’s broad order prematurely struck the         explanation runs the risk of distorting jury
balance between probativeness and                  deliberations. The absence of proof that
prejudice, and did so for trial proceedings        would normally be expected can cause the
yet to occur in another court system before        jury to draw unwarranted inferences.

                                              28
“[T]here lies the need for evidence in all           appropriateness of injunctive relief, the
its particularity to satisfy the jurors’             court must give consideration to the
expectations about what proper proof                 practicality of drafting and enforcing the
should be.” Old Chief, 519 U.S. at 188.              order or judgment. If drafting and
For this reason, unless a stipulation                enforcing are found to be impracticable,
adequately concedes an element of proof,             the injunction should not be granted.”).
it can prejudice the party carrying the              The District Court’s orders raise practical
burden of proof. In this case, the proposed          and institutional concerns in this regard.
concession by Wyeth would, as Judge
                                                             PTO 2828, as we have seen, is not
Powell saw, “raise a substantial possibility
                                                     limited to protecting the core of the
that one or more jurors would be
                                                     settlement’s damages limitation by
influenced by the lack of evidence and the
                                                     forbidding plaintiffs from seeking such
lack of explanation.” Joint App. 1290.
                                                     damages in their pleadings or presenting
       Insofar as the injunctions barred the         evidence relevant only to such damages.
use of evidence that was relevant to                 Rather, the order enforces a series of
genuine issues in the state trial—apart              prophylactic prohibitions that affect
from punitive, multiple, or exemplary                plaintiffs’ ability to obtain permissible
damages—they placed restrictions on opt-             compensatory damages. As written, PTO
out plaintiffs that went beyond the fair             2828—which is enforceable, of course, by
terms of the settlement agreement.                   the sanction of contempt—would make it
                                                     very difficult for plaintiff to try the case
                     3.
                                                     that is preserved to her under the
       Finally, we note that injunctions             settlement agreement.
must be enforceable, workable, and
                                                             Numerous exhibits and portions of
capable of court supervision. See Lemon
                                                     testimony are excluded definitively,
v. Kurtzman, 411 U.S. 192, 200 (1973)
                                                     regardless of the purpose for which they
(“[E]quitable remedies are a special blend
                                                     are offered. By way of example, the
of what is necessary, what is fair, and what
                                                     District Court nixed deposition testimony
is workable.”); United States v. Paramount
                                                     about efforts by Wyeth employees to avoid
Pictures, Inc., 334 U.S. 131, 161-66 (1948)
                                                     a “black box” warning. It is not clear what
(vacating injunction that implicated the
                                                     recourse a plaintiff would have if, during
“judiciary heavily in the details of business
                                                     the course of trial, a W yeth employee were
management” in order for supervision “to
                                                     to assert that Wyeth was always
be effective”); Rutland Marble Co. v.
                                                     scrupulous and forthcoming on warning
Ripley, 77 U.S. 339, 358-59 (1870) (“It is
                                                     issues. By its terms, the order would
manifest that the court cannot superintend
                                                     appear to forbid plaintiff from offering the
the execution of such a decree. It is quite
                                                     deposition testimony for purposes of
impracticable.”); Restatement (Second) of
                                                     rebuttal or impeachment. Nor, on the face
Torts § 943 cmt. a (“In determining the
                                                     of the order, would plaintiff be justified in

                                                29
introducing evidence of failure to warn             considerations were discussed in meetings
regarding PPH on the ground that it                 about warnings?
negates the trial testimony that W yeth is
                                                            Again, in the usual case counsel
always forthcoming. Normally, a trial
                                                    faced with such a question would ask the
judge might well conclude such testimony
                                                    trial judge for guidance either by way of
opened the door for previously out-of-
                                                    motion or sidebar. But PTO 2828 would
bounds evidence. PTO 2828 does not vest
                                                    make those questions fodder for the
the state judge with that discretion.
                                                    District Court, without a full appreciation
Presumably, the parties—and the state
                                                    of the flow of the testimony. Counsel
court—would have to contact the District
                                                    might have to seek, for example,
Court and seek a modification of PTO
                                                    telephonic sidebars with the District Court.
2828.
                                                    The order creates a highly intrusive and
        Even more awkward is the broadly            unworkable regulatory scheme.
framed prohibition against offering
                                                            Moreover, we emphasize, the rules
evidence “related directly or indirectly” to
                                                    imposed by PTO 2828 are not merely
such topics as wanton or similar conduct
                                                    enforceable by the usual mechanism of the
by Wyeth, or Wyeth’s marketing of diet
                                                    trial court’s sustaining objections or,
drugs “to the extent Wyeth placed
                                                    perhaps, granting a mistrial. Here, a
marketing or promotion ahead of health or
                                                    viola tion o f t he ru le — a w rong
safety concerns.”     Almost any proof
                                                    guess—could result in a punitive sanction.
related to negligence can be regarded as
                                                    There will be strong pressure on counsel to
“related indirectly” to wanton conduct.
                                                    steer well clear of the line and possibly
Hypothetically, imagine that Clark calls a
                                                    forego offering admissible evidence that
witness who will testify that Wyeth
                                                    Clark would normally expect to get before
officials were made aware of VHD
                                                    the jury.
dangers and reached a decision that no
warning should be published. PTO 2828                      This order is even more problematic
could be read to preclude this evidence             insofar as it bans counsel from making
because it is “indirectly related” to               argument “to the court” regarding these
“wanton or similar conduct.” Of course,             topics. Read literally (as counsel must),
the evidence is also highly probative of            this would prevent Clark from even
negligence.                                         arguing to the state judge, outside the
                                                    presence of the jury, that certain evidence
       Another hypothetical: Suppose
                                                    falls within or outside the scope of PTO
Wyeth calls a witness who testifies that
                                                    2828. We do not think the District Court
decisions about warnings are made only
                                                    actually meant to preclude such argument.
after careful evaluation of scientific
                                                    Indeed, it is hard to see what purpose
evidence. Would PTO 2828 allow Clark’s
                                                    would be served—and easy to see the
attorney to cross-examine on (still
                                                    problems that would arise— in restraining
hypothetical) instances where marketing

                                               30
counsel from making arguments in state               supervised by the District Court in this
court. The point is that the District Court’s        case is a landmark effort to reconcile the
understandable effort to lock the door               rights of millions of individual plaintiffs
against impermissible attempts to obtain             with the efficiencies and fairness of a
exemplary damages led to an order that               class-based settlement. Critical to this
seriously interferes with Clark’s rights to          effort was the allowance of downstream
try her case.                                        opt-outs, so that potential class members
                                                     were not faced with an all-or-nothing
        Implicit in our discussion as well is
                                                     decision at the threshold. To make this
the fact that PTO 2828 disrupts the state
                                                     allowance meaningful, the settlement had
court’s ability to manage its own judicial
                                                     to protect Wyeth against its largest fear,
process. As the previous illustrations
                                                     potentially ruinous punitive damage
suggest, PTO 2828 would remove from the
                                                     awards. At the same time, it had to allow
state judge a whole panoply of decisions
                                                     intermediate opt-out plaintiffs to have a
that he or she would normally be
                                                     fair chance to litigate their claims and
authorized—indeed obliged—to make.
                                                     obtain those damages that were expressly
But the process the order leaves is unclear.
                                                     preserved.
Some of the exclusions in the order are left
to be applied by the state judge. Others are                 The District Court had, and still
not. It is not clear, for example, whether           has, the power to effectuate and protect the
the state judge would determine whether              terms of this bargain. But in doing so, the
evidence is “related indirectly” to                  Court must be mindful of two limiting
forbidden topics.                                    considerations: (1) opt-outs must be able
                                                     to fairly litigate the claims preserved to
        As we have held, the District Court
                                                     them under the agreement, and (2)
had the unquestioned right to effectuate
                                                     intrusion into state court proceedings
the restraints of the settlement through an
                                                     should be minimized.
order limiting opt-out plaintiffs’ conduct in
ancillary state proceedings.         But we                  Accordingly, the District Court
believe that that power must be exercised            erred in imposing the evidentiary
in a manner that minimizes entanglement              restrictions of PTO 2828 because those
in the state judge’s ability to supervise            restrictions were overbroad and impinged
judicial proceedings in his own courtroom.           on plaintiffs’ rights under the settlement,
Similarly, the order should be fashioned in          and they unduly entangled the Court in the
a manner that presumes that the state judge          management of separate state court
is capable and willing to enforce that               proceedings.       PTO 2828’s pre-trial
settlement without close and intrusive               evidentiary restrictions survive these
supervision by the District Court.                   limiting principles only insofar as they
                                                     prohibit opt-outs from offering evidence
                    III.
                                                     that is relevant exclusively to forbidden
       The    settlement    approved     and         damages. See PTO 2828, ¶¶ (3)(a)-(b). As

                                                31
appellants themselves concede, an                            We note that although we have
injunction to that effect is entirely                limited the District Court’s ability to
permissible.                                         prohibit the parties from offering certain
                                                     evidence in their state court trials, the state
        Specifically, the following portions
                                                     courts are presumably mindful of the
of PTO 2828 must be vacated: (i) the
                                                     obligation to honor the settlement
categorical evidentiary restrictions in
                                                     agreement, and to ensure that the parties
Subsections (2)(b)-(c) and Subsections
                                                     do not evade it. That will undoubtedly
(3)(c)-(h), insofar as they preclude
                                                     impel the state courts during trial to
plaintiffs from introducing evidence
                                                     exclude evidence when its prejudicial
relevant to proving their VHD claims in
                                                     effect (namely its tendency to inflame the
state court; and (ii) the limitations on
                                                     jury and improperly inflate compensatory
exhibits and deposition testimony in
                                                     damages) outweighs its probative value.
Section (4), insofar as they preclude
                                                     We are confident, particularly in light of
plaintiffs from introducing evidence
                                                     the previous state court orders in the
relevant to proving their claims in state
                                                     record, that the state courts can and will
court. PTO 2828 is consistent with this
                                                     capably manage this task.
opinion insofar as it prohibits plaintiffs
from “introducing any evidence” relevant                      In addition, our opinion leaves the
exclusively to “punitive, exemplary or               District Court free to consider other
multiple damages, however described,”                measures, aside from imposing evidentiary
which specifically includes evidence of              restraints, that will effectuate the
“(a) Wyeth’s profits, size or financial              limitations of the settlement agreement.
condition”; and “(b) the amount or size of           The District Court might consider, for
Wyeth’s sales of diet drugs or other                 example, ordering language to be included
products.”                                           in a stipulation or proposed jury instruction
                                                     that would make it clear to the jury that
       PTO 2828 also runs afoul of this
                                                     exemplary damages may not be awarded.
opinion insofar as it prohibits the parties
                                                     Or, the Court could direct the parties to
from “making any statement or argument
                                                     agree to a bifurcated trial—where damages
to the court.” But the order is consistent
                                                     are determined apart from liability—in the
with this opinion insofar as it prohibits the
                                                     event that the state court were to deem it
parties from “making any statement or
                                                     advisable.
argument to the . . . jury related directly”
to evidence relevant only to punitive                       Moreover, while we understand the
damages. 13                                          desirability of taking steps to protect the
                                                     settlement agreement before a trial occurs,

       13
       Although we specifically address
PTO 2828, the most comprehensive order,              modify all orders at issue in this appeal so
we expect that the District Court will               that they are consistent with this opinion.

                                                32
the District Court is not without recourse           restrictions to which intermediate opt-outs
in the event that a verdict is rendered that         are bound. But the Court’s power has to
appears to grant punitive damages under              be exercised consistent with the terms of
the guise of some other damage category.             the notice and agreement on which
The precise circumstances that might arise           potential class members relied at the outset
are too speculative to discuss with                  of the process. Moreover, it has to be
specificity. But post-trial remedies should          applied to the state courts with appropriate
not be categorically rejected.14                     consideration for limitations of equity,
                                                     federalism, and comity.
        We recognize that the District
Court’s task is a difficult one, particularly               Accordingly, we will vacate the
in light of the patent efforts by plaintiffs’        Court’s injunctions and remand with
counsel to press against the damages                 instructions to modify them in accordance
                                                     with this opinion.

       14
          At oral argument, we raised the
question whether the District Court had
power after a verdict to limit or remit a
damage award that seemed so excessive
that it amounted to exemplary damages.
We particularly focused on the Rooker-
Feldman doctrine. This decision is not the
proper place to consider fully the extent to
which the Rooker-Feldman doctrine might
circumscribe the District Court’s ability to
effectuate the agreement’s punitive
damages provision after a jury has
awarded a plaintiff damages. We note,
however, that where “a federal court’s
proper exercise of its jurisdiction to
manage its cases has the secondary effect
of voiding a state court determination, it is
not a review of that order for purposes of
the Rooker-Feldman doctrine.” Diet Drugs
I, 282 F.3d at 242. On the other hand, the
Full Faith and Credit Act, 28 U.S.C. §
1738, precludes a federal court from
reconsidering a state court’s judgment as
to the preclusive effect of a federal court
judgment. See Parsons Steel, Inc. v. First
Ala. Bank, 474 U.S. 518 (1986).

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