In re Diet Drugs Products Liab. Litigation, 03-3401.
| Decision Date | 30 November 2005 |
| Docket Number | no. 04-3661.,No. 03-3402.,No. 03-4465.,No. 03-3401.,03-3401.,03-3402.,03-4465.,04-3661. |
| Citation | 431 F.3d 141 |
| Parties | In re: DIET DRUGS (PHENTERMINE/FENFLURAMINE/DEXFENFLURAMINE) PRODUCTS LIABILITY LITIGATION Clara Clark, Linda Smart and all other class members represented by Fleming & Associates, L.L.P., Appellants Hariton & D'Angelo, LLP and Napoli, Kaiser, Bern & Associates, LLP, on behalf of themselves, claimant James Axford and similarly situated class members represented by the Hariton and Napoli Firms whose claims are affected by Pretrial Order No. 2929, Appellants Shanne Webb-Cochran, Renai Kuykendall, Willa Sartin, Dawn Stewart and Joanne Valenti, on behalf of themselves and all other class members who have ingested fen-phen and who suffer, or will suffer, from elevated pulmonary hypertension not secondary to valvular heart disease, Appellants Doris Weller and Ellen Carey, whose claims are affected by Pretrial Order No. 3849, Appellants |
| Court | U.S. Court of Appeals — Third Circuit |
Thomas C. Goldstein, (Argued), Goldstein & Howe, Washington, D.C., Howard I. Langer, (Argued), Langer & Grogram, Philadelphia, PA, Sylvia Davidow, Fleming & Associates, Houston, TX, Mario D'Angelo, Hariton & D'Angelo, Great River, NY, Paul J. Napoli, Denise A. Rubin, Napoli, Kaiser, Bern & Associates, Great River, NY, for Appellants.
Robert D. Rosenbaum, (Argued), Arnold & Porter, Washington, DC, Peter L. Zimroth, Arnold & Porter, New York, NY, John J. Cummings, III, Cummings, Cummings & Dudenhefer, New Orleans, LA, Samuel Issacharoff, (Argued), New York
University Law School, New York, NY, Michael D. Fishbein, (Argued), Fred S. Longer, Arnold Levin, Levin, Fishbein, Sedran & Berman, Philadelphia, PA, for Appellees.
Before ROTH, FUENTES and STAPLETON, Circuit Judges.
These appeals arise from the District Court's efforts to oversee the Nationwide Class Action Settlement Agreement in the multi-district (MDL) 1203 litigation between Wyeth1 and a class comprising former users of Wyeth's diet medications, fenfluramine and dexfenfluramine. This appeal is the consolidation of challenges by three different groups of Appellants, all claiming that they should not be bound by the Settlement Agreement. For the reasons discussed, we find that all three groups of Appellants are bound by the Settlement Agreement and we will affirm the District Court's decision.
The history of this case is detailed in In re Diet Drugs Prod. Liab. Litig., 282 F.3d 220, 225-29 (3d Cir.2002) and will only be briefly summarized here. In 1999, Wyeth reached a settlement that provided a variety of remedies for users and former users of its diet medications. The District Court approved the plan in Pretrial Order 1415 and the accompanying memorandum. The remedies provided depended on whether the class members were ultimately diagnosed with one of several heart conditions.
Each class member was placed into one of five groups. Class 1 consisted of class members who did not know whether they had a condition termed FDA positive ventricular heart disease (VHD),2 and was further subdivided into class members who had used the diet drugs for more than 60 days and class members who had used the drugs for less than 60 days. Class 2 consisted of class members who knew they had FDA positive VHD and was also subdivided based on diet drug usage of more or less than 60 days. Class 3 was comprised of class members who did not know whether they had FDA positive VHD at the time of settlement, but were diagnosed with a less serious condition called mild mitral regurgitation by the end of the settlement screening period.
The settlement provided funding for screening tests to determine whether class members had qualifying heart disease and for compensation for the cost of the drugs and medical treatment, depending on the ultimate diagnosis. The Settlement Agreement expressly barred participating class members from pursuing any settled claims against Wyeth.
The settlement provided the option for class members to opt out at the time of settlement ("initial opt outs") or to be bound by the Settlement Agreement. Those class members diagnosed as having FDA positive VHD by a specified date could either register for further benefits or exercise an "intermediate opt out" and sue Wyeth in the state tort system. In addition, those class members diagnosed as having a lesser condition, mild mitral regurgitation, could either claim compensation under the settlement or exercise a "back end opt out" and sue Wyeth in the tort system. The class members who exercised intermediate or back end opt outs are collectively referred to as "downstream opt outs." In exchange for Wyeth's waiver of a statute of limitations defense, class members exercising downstream opt out rights cannot sue for punitive damages.
The Settlement Agreement explicitly excluded those individuals with a more serious condition, primary pulmonary hypertension ("PPH"), allowing them to sue Wyeth in the state tort system. The settlement did not include any recovery for plaintiffs alleging a variety of conditions, including neurotoxicity and elevated pulmonary hypertension ("PH"), because the District Court found that the evidence did not support a connection between the use of diet drugs and these conditions.
We have jurisdiction over Pretrial Orders 2929, 3849 and 3085 because they are all final orders of the District Court within the meaning of 28 U.S.C. § 1291.
The District Court's legal conclusions are subject to plenary review. In re Prudential Ins. Co. of Am. Sales Practice Litig., 261 F.3d 355, 363 (3d Cir.2001). We review the District Court's determination of adequacy of representation as an exercise of its discretionary authority in class action proceedings for abuse of discretion. In re Prudential Ins. Co. of Am. Sales Practices Litig., 148 F.3d 283, 299 (3d Cir.1998). All underlying factual issues are reviewed for clear error. Id.
In all three appeals before us, Appellants argue that they are not bound by the Settlement Agreement because their due process rights were not upheld, either because of inadequate notice or inadequate representation. A threshold question in all three of these appeals is whether these Appellants are entitled to bring a collateral attack on the Settlement Agreement.
A class member must have certain due process protections in order to be bound by a class settlement agreement. The general principle is that "there has been a failure of due process only in those cases where it cannot be said that the procedure adopted, fairly insures the protection of the interests of absent parties who are to be bound by it." Hansberry v. Lee, 311 U.S. 32, 42, 61 S.Ct. 115, 85 L.Ed. 22 (1940). In a class where opt out rights are afforded, these protections are adequate representation by the class representatives, notice of the class proceedings, and the opportunity to be heard and participate in the class proceedings. Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 811-12, 105 S.Ct. 2965, 86 L.Ed.2d 628 (1985). The adequate representation requirement "serves to uncover conflicts of interest between named parties and the class they seek to represent." Amchem Products, Inc. v. Windsor, 521 U.S. 591, 625, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997). This requirement is codified in Fed.R.Civ.P. 23(a)(4), which requires that "the representative parties will fairly and adequately protect the interests of the class."
There must be a process by which an individual class member or group of class members can challenge whether these due process protections were afforded to them. Grimes v. Vitalink Comm'ns Corp., 17 F.3d 1553, 1558 (3d Cir.1994). This challenge can take the form of an appeal of the class certification itself, a collateral attack on an already-certified class, or a Rule 60(b) motion. In re Real Estate Title & Settlement Servs. Antitrust Litig., 869 F.2d 760, 767 (3d Cir.1989).
Class members are not, however, entitled to unlimited attacks on the class settlement. Once a court has decided that the due process protections did occur for a particular class member or group of class members, the issue may not be relitigated. Appellants understandably rely heavily on Stephenson v. Dow Chemical Co., 273 F.3d 249 (2d Cir.2001), aff'd by equally divided Court, 539 U.S. 111, 123 S.Ct. 2161, 156 L.Ed.2d 106 (2003), in support of their insistence that they have a right to collaterally attack the adequacy of representation determination of the class action court. While Stephenson supports appellant's position on this issue, it is inconsistent with circuit case law by which this panel is bound. In Carlough v. Amchem Products, Inc., 10 F.3d 189 (3d Cir.1993), we held that notice and failure to exercise an opportunity to "opt out" constitutes consent to the jurisdiction of the class action court by an absent member of a plaintiff class even when that member lacks minimum contact with the class action forum. Then, in Grimes v. Vitalink Communications Corp., 17 F.3d 1553 (3d Cir.1994), we further held that, where the class action court has jurisdiction over an absent member of a plaintiff class and it litigates and determines the adequacy of the representation of that member, the member is foreclosed from later relitigating that issue. Thus, it follows that challenges to the terms of a settlement agreement, itself, are not appropriate for collateral review. See In re Orthopedic Bone Screw Products Liab. Litig., 350 F.3d 360, 364-65 (3d Cir.2003) ()
The appeals before this Court are from three Pretrial Orders of the District Court,...
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...v. Salazar, 679 F.3d 909 (D.C.Cir.2012). Plaintiff cannot now attempt to relitigate that issue in this forum. See In re Diet Drugs, 431 F.3d 141, 146 (3d Cir.2005) (“Once a court has decided that due process protections did occur for a particular class member or group of class members, the ......
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