Filed: May 25, 2004
Latest Update: Mar. 02, 2020
Summary: 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of the United 2004 Decisions States Court of Appeals for the Third Circuit 5-25-2004 In Re: Diet Drugs Precedential or Non-Precedential: Precedential Docket No. 02-4582 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2004 Recommended Citation "In Re: Diet Drugs " (2004). 2004 Decisions. Paper 645. http://digitalcommons.law.villanova.edu/thirdcircuit_2004/645 This decision is brought to you for free and open access by the Opinions of the United S
Summary: 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of the United 2004 Decisions States Court of Appeals for the Third Circuit 5-25-2004 In Re: Diet Drugs Precedential or Non-Precedential: Precedential Docket No. 02-4582 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2004 Recommended Citation "In Re: Diet Drugs " (2004). 2004 Decisions. Paper 645. http://digitalcommons.law.villanova.edu/thirdcircuit_2004/645 This decision is brought to you for free and open access by the Opinions of the United St..
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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Precedential or Non-Precedential: Precedential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
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2004
Recommended Citation
"In Re: Diet Drugs " (2004). 2004 Decisions. Paper 645.
http://digitalcommons.law.villanova.edu/thirdcircuit_2004/645
This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
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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).
33
