Opinion · Court of Appeals for the Third Circuit
Carlough v. Amchem Products, Inc.
10 F.3d 189
- Type
- Opinion
- Court
- Court of Appeals for the Third Circuit
- Jurisdiction
- Federal
- Date
- 1993-12-01
- Topic
- general
noting that the existence of opt out rights supports injunction of state court actions pending imminent settlement of a federal class action case | noting that the existence of opt out rights supports injunction of state court actions pending imminent settlement of a federal class action case | stating that “[t]he two statutes act in concert to permit issuance of an injunction” | affirming finding of jurisdiction underlying injunction aimed at out-of-state class members and their attorneys and representatives | affirming finding of jurisdiction underlying injunction aimed at out-of-state class members and their attorneys and representatives | adopting the reasoning of the district court’s October 6, 1993 opinion in Carlough v. Amchem Products, Inc., 834 F.Supp. 1437, 1465 (E.D. Penn. 1993) | upholding an All Writs Act injunction directed at a state court action that threatened to derail a pending settlement in a complex multidistrict class action case | affirming grant of preliminary injunction when “the prospect of settlement was indeed imminent” and “the proposed settlement agreement [had been] filed simultaneously with the federal class action complaint” | "A plaintiff class member who is afforded an opportunity to opt out, but who fails to exercise that option, may be deemed to have consented to jurisdiction." | “A plaintiff class member who is afforded an opportunity to opt out, but who fails to exercise that option, may be deemed to have consented to jurisdiction.” | enjoined plaintiffs had not yet been given the opportunity to opt out, so state suit was premature | enjoined plaintiffs had not yet extent of pleading been given the opportunity to opt out, so allegations not applicable state suit was premature | class action with imminent settlement and fairness hearing where injunction prevented mass opting out of the plaintiffs of one state for duplicative state proceedings | if member has not been given opportunity to opt out in class action, he must either have minimum contacts with forum or consent to jurisdiction | "Nevertheless, once the district court approved the dissemination of notice and commenced the opt out period pursuant to its October 27, 1993 order, the [personal] jurisdictional problem was resolved.” | the personal jurisdiction requirement “is derived from policy considerations bearing upon comity and federalism” | "we agree with the district court findings that judicial precedent as well as the preemptive cast of the Gore suit and the recent establishment of the opt out period overcome the reluctant disposition of the courts to issue a necessary in aid injunction.” | class action where settlement imminent
Citator
- Cited by
- 29 opinions
CARLOUGH v. AMCHEM PRODUCTS, INC.,10 F.3d 189(3rd Cir. 1993)
EDWARD M. CARLOUGH; PAVLOS KEKRIDES; NAFSSICA KEKRIDES, HIS WIFE; LAVERNE
WINBUN, EXECUTRIX OF THE ESTATE OF JOSEPH E. WINBUN, DECEASED, AND IN HER
OWN RIGHT; AMBROSE VOGT, JR.; JOANNE VOGT, HIS WIFE; CARLOS RAVER; DOROTHY
M. RAVER, HIS WIFE; JOHN A. BAUMGARTNER; ANNA MARIE BAUMGARTNER, HIS WIFE;
TIMOTHY MURPHY; GAY MURPHY, HIS WIFE; TY T. ANNAS; FRED ANGUS SYLVESTER, ON
BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED.
CARL D. ROLAND; GLORIA J. ROLAND, HIS WIFE; WALTER L. MAYS, SR.; SHIRLEY G.
MAYS, HIS WIFE, PLAINTIFFS-INTERVENORS, v. AMCHEM PRODUCTS, INC.; A.P. GREEN
INDUSTRIES, INC.; ARMSTRONG WORLD INDUSTRIES, INC.; CERTAINTEED CORPORATION;
C.E. THURSTON SONS, INC.; DANA CORPORATION; FERODO AMERICA, INC.;
FLEXITALLIC, INC.; GAF BUILDING MATERIALS CORPORATION; I.U. NORTH AMERICA,
INC.; MAREMONT CORPORATION; NATIONAL GYPSUM COMPANY; NATIONAL SERVICES
INDUSTRIES, INC.; NOSROC CORPORATION; PFIZER, INC.; QUIGLEY COMPANY, INC.;
SHOOK FLETCHER INSULATION COMPANY; T N, PLC; UNION CARBIDE CHEMICALS AND
PLASTICS CORPORATION; UNITED STATES GYPSUM COMPANY, THIRD-PARTY PLAINTIFFS,
v. ADMIRAL INSURANCE COMPANY; AFFILIATED FM INSURANCE COMPANY; AIU INSURANCE
COMPANY; ALLIANZ INSURANCE COMPANY; ALLIANZ UNDERWRITERS INSURANCE COMPANY,
INDIVIDUALLY AND AS SUCCESSOR TO ALLIANZ UNDERWRITERS INC.; ALLSTATE
INSURANCE COMPANY, AS SUCCESSOR TO NORTHBROOK EXCESS AND SURPLUS INSURANCE
COMPANY AND NORTHBROOK INSURANCE COMPANY; AMERICAN BANKERS INSURANCE COMPANY
OF FLORIDA; AMERICAN CENTENNIAL INSURANCE COMPANY; AMERICAN HOME ASSURANCE
COMPANY; AMERICAN MOTORISTS INSURANCE COMPANY; AMERICAN RE-INSURANCE
COMPANY; APPALACHIAN INSURANCE COMPANY OF PROVIDENCE; ARGONAUT INSURANCE
COMPANY; ATLANTA INTERNATIONAL INSURANCE COMPANY; BRITAMCO, LIMITED; CAISSE
INDUSTRIELLE D'ASSURANCE MUTUELLE; C.E. HEALTH COMPENSATION AND LIABILITY
INSURANCE
Page 190
COMPANY, AS SUCCESSOR TO EMPLOYERS' SURPLUS LINES INSURANCE COMPANY;
CENTENNIAL INSURANCE COMPANY; CENTRAL NATIONAL INSURANCE COMPANY OF OMAHA;
CHICAGO INSURANCE COMPANY; CITY INSURANCE COMPANY; COLONIA VERSICHERUNG
AKTIENGESELLSCHAFT; COLUMBIA CASUALTY COMPANY; COMMERCIAL UNION INSURANCE
COMPANY, AS SUCCESSOR TO COLUMBIA CASUALTY COMPANY, EMPLOYERS COMMERCIAL
UNION INSURANCE COMPANY, EMPLOYERS COMMERCIAL UNION INSURANCE COMPANY OF
AMERICA, AND EMPLOYERS' LIABILITY ASSURANCE CORPORATION LIMITED; COMPAGNIE
EUROPEENNE D'ASSURANCES INDUSTRIELLES S.A.; THE CONSTITUTION STATE
INSURANCE COMPANY; CONTINENTAL CASUALTY COMPANY; EMPLOYERS MUTUAL CASUALTY
COMPANY; EVANSTON INSURANCE COMPANY; EXECUTIVE RE INDEMNITY, INC., AS
SUCCESSOR TO AMERICAN EXCESS INSURANCE COMPANY; FEDERAL INSURANCE COMPANY;
GENERAL REINSURANCE CORPORATION; GIBRALTAR CASUALTY COMPANY; GOVERNMENT
EMPLOYEES INSURANCE COMPANY; GRANITE STATE INSURANCE COMPANY; GREAT
AMERICAN INSURANCE COMPANY, INDIVIDUALLY AND AS SUCCESSOR TO TRANSPORT
INDEMNITY COMPANY; HIGHLANDS INSURANCE COMPANY; THE HOME INDEMNITY
COMPANY; THE HOME INSURANCE COMPANY; HOUSTON GENERAL INSURANCE COMPANY;
HUDSON INSURANCE COMPANY; INSCO, LIMITED; INSURANCE COMPANY OF THE STATE
OF PENNSYLVANIA; INTERSTATE FIRE CASUALTY COMPANY; JEFFERSON INSURANCE
COMPANY OF NEW YORK; LANDMARK INSURANCE COMPANY; La PRESERVATRICE FONCIERE
TIARD, INDIVIDUALLY AND AS SUCCESSOR TO La FONCIERE ASSURANCES TRANSPORTS
ACCIDENTS AND La PRESERVATRICE; Le SECOURS; LEXINGTON INSURANCE COMPANY;
LILLOISE D'ASSURANCES, AS SUCCESSOR TO LILLOISE D'ASSURANCES Et De
REASSURANCES; LONDON GUARANTEE AND ACCIDENT COMPANY OF NEW YORK;
LUMBERMENS MUTUAL CASUALTY COMPANY; MARYLAND CASUALTY COMPANY; MEAD
REINSURANCE CORPORATION; MICHIGAN MUTUAL INSURANCE COMPANY; MUTUELLE
GENERALE FRANCAISE; NATIONAL AMERICAN INSURANCE COMPANY OF CALIFORNIA, AS
SUCCESSOR TO THE STUYVESANT INSURANCE COMPANY; NATIONAL UNION FIRE
INSURANCE COMPANY OF PITTSBURGH, Pa.; NORTHBROOK INDEMNITY COMPANY; NORTH
STAR REINSURANCE CORPORATION; NORTHWESTERN NATIONAL INSURANCE COMPANY,
INDIVIDUALLY AND AS SUCCESSOR TO BELLEFONTE INSURANCE COMPANY; OLD
REPUBLIC INSURANCE COMPANY; PENNSYLVANIA MANUFACTURERS' ASSOCIATION
INSURANCE COMPANY; THE PROTECTIVE NATIONAL INSURANCE COMPANY OF OMAHA;
PRUDENTIAL REINSURANCE COMPANY; PURITAN INSURANCE COMPANY, INDIVIDUALLY
AND AS SUCCESSOR TO THE MANHATTAN FIRE AND MARINE INSURANCE COMPANY;
RANGER INSURANCE COMPANY; REPUBLIC INSURANCE COMPANY; SAFECO INSURANCE
COMPANY OF AMERICA; SAFETY NATIONAL CASUALTY CORPORATION, AS SUCCESSOR TO
SAFETY MUTUAL CASUALTY CORPORATION; ST. PAUL FIRE AND MARINE INSURANCE
COMPANY, INDIVIDUALLY AND AS SUCCESSOR TO BIRMINGHAM FIRE INSURANCE
COMPANY; ST. PAUL GUARDIAN INSURANCE COMPANY; ST. PAUL SURPLUS LINES
INSURANCE COMPANY; STONEWALL INSURANCE COMPANY; STONEWALL SURPLUS LINES
INSURANCE COMPANY; SUN ALLIANCE AND LONDON INSURANCE PLC; TOKIO MARINE
FIRE INSURANCE COMPANY; THE TRAVELERS INDEMNITY COMPANY; THE TRAVELERS
INSURANCE COMPANY; UNIGARD SECURITY INSURANCE COMPANY, AS SUCCESSOR TO
UNIGARD MUTUAL INSURANCE COMPANY; UNION DES ASSURANCES De PARIS; YOSEMITE
INSURANCE COMPANY; CERTAIN UNDERWRITERS AT LLOYDS OF LONDON, (INCLUDING
JOHN DOES 1 TO 200, BEING FICTITIOUS NAMES), AND CERTAIN LONDON MARKET
COMPANIES (INCLUDING JOHN DOES 201 TO 400, BEING FICTITIOUS NAMES),
THIRD-PARTY DEFENDANTS, REGORY GORE, WILLIAM C. FERREL, MICHAEL P. CONLEY,
AND LYNN A. CONLEY; THEIR ATTORNEYS, AGENTS AND EMPLOYEES; AND THE CLASS
THEY PURPORT TO REPRESENT IN
Page 191
THE ACTION FILED IN THE CIRCUIT COURT OF MONONGALIA COUNTY, WEST VIRGINIA
ON MARCH 17, 1993, CAPTIONED GORE ET AL. V. AMCHEM PRODUCTS, INC. ET AL.,
C.A. No. 93-C-195,fn*APPELLANTS.
No. 93-1482.
United States Court of Appeals, Third Circuit.
Argued July 27, 1993.
Decided December 1, 1993.
John D. Aldock, (argued), Wendy S. White, David M. Battan, Shea Gardner, Washington,Page 193DC, John G. Gaul, Center for Claims Resolution, Princeton, NY, for appellees Amchem Products, Inc., A.P. Green Ind., Inc., Armstrong World Industries, Inc., Certainteed Corp., CE Thurston Sons, Dana Corp., Ferodo America, Inc., Flexitallic, Inc., GAF Bldg. Materials, I.U. North America, Inc., Maremont Corp., Nat. Gypsum Co., Nat. Ser. Ind., Inc., NOSROC Corp., Pfizer, Inc., Quigley Co., Inc., Shook Fletcher Insulation Co., T N PLC, Union Carbide Chemicals and Plastics Corp., U.S. Gypsum.
Elit R. Felix, II, Margolis, Edelstein, Scherlis Kraemer, Philadelphia, PA, for appellees Allianz Ins. Co., Allianz Underwriters, individually and as successor to Allianz Underwriters Inc., Argonaut Ins. Co., Chicago Insurance Co., Interstate Fire Cas. Co.
joseph M. Oberlies, Connor Weber, Philadelphia, PA, for appellees American Centennial Ins.
Stephen F. Brock, Manta Welge, Philadelphia, PA, for appellees American Re-Insurance Co., Exec. re Indem., as successor to American Excess Ins. Co.
Lawrence M. Silverman, Silverman, Coopersmith Frimmer, Philadelphia, PA, for appellees Central Nat. Ins. Co. of Omaha; Protective Nat. Ins. Co. of Omaha.
John P. O'Dea, Stradley, Ronon, Stevens Young, Philadelphia, PA, for appellees Columbia Cas. Co., Cont. Cas. Co.
Jay M. Levin, Cozen O'Connor, Philadelphia, PA, for appellee Commercial Union Ins. Co., as successor to Columbia Cas. Co., Employers Commercial Union Ins. Co., Employers Commercial Union Ins. Co. of America, and Employers' Liability Assur. Corp. Ltd.
Daniel P. Lynch, Timby, Brown Timby, Philadelphia, PA, for appellees Constitution State, Travelers Indem. Co., Travelers Ins. Co.
David J. D'Aloia, Sean R. Kelly, Saiber, Schlesinger, Satz Goldstein, Newark, NJ, for appellees Gibraltar Cas. Co., Prudential Reins. Co.
Rudolph Garcia, Saul, Ewing, Remick Saul, Philadelphia, PA, for appellee Maryland Cas. Co.
Lewis R. Olshin, Duane, Morris Heckscher, Philadelphia, PA, for appellee Pa. Mfg. Assn. Ins. Co.
Stephen P. Chawaga, Fitzpatrick Tanker, Philadelphia, PA, Debra M. Patalkis, Chadbourne Parke, New York City, for appellee Republic Ins. Co.
Thomas W. Henderson (argued), Tybe A. Brett, Antonio D. Pyle, Henderson Goldberg, Pittsburgh, PA (Scott S. Segal, Segal Davis, Charleston, WV, of counsel), for appellants Gregory Gore, William C. Ferrel, Michael P. Conley, Lynn A. Conley, their attorneys, agents and employees, and the class they purport to represent in the action filed in the Circuit Court of Monongalia County, WV, on March 17, 1993, captioned Gore et al. v. Amchem Products, Inc., et al., C.A. No. 93-C-195.
David L. Meade, Shinaberry, Meade Venezia, L.C., William C. Field, James Humphreys, Stuart Calwell, Calwell McCormick, Charleston, WV, for amicus curiae Shinaberry, Meade Venezia, L.C., William C. Field, Law Offices of James Humphreys, and Calwell McCormick.
Before: MANSMANN, GREENBERG and LEWIS, Circuit Judges.
[1]OPINION OF THE COURT
[3] TheGoreplaintiffs first asserted that the injunction was not binding on them because it purported to be effective outside of the jurisdictional reach of the federal district court. Essentially, theGoreplaintiffs claimed that unresolved jurisdictional challenges to the federal district court's subject matter jurisdiction in the actionsub judicedeprived the district court of authority to issue the injunction. TheGoreplaintiffs further claimed, among other things, that the district court failed to observe the basic requisite of obtaining personal jurisdiction over the absent class members whom it purported to bind under the injunction. The injunction was issued prior to notice to theGoreplaintiffs of the commencement of the federal class action, prior to the establishment of the "opt out" period, without theGoreplaintiffs' consent to the jurisdiction of the federal court, and without some of theGoreplaintiffs having minimum contacts with the Eastern District of Pennsylvania. These claims have since been vitiated by a belated October 6, 1993 order of the district court finding that it indeed had subject matter jurisdiction over theCarloughaction, and an even more belated October 27, 1993, order of the district court approving notice to be disseminated to theCarloughclass. Nevertheless, we find that theGoreappeal continues to be viable because the question remains whether the injunction, which is still operative over the pendingGoreaction in the state court, is permitted under the "necessary in aid" exception to the interdicts of the Anti-Injunction Act,28 U.S.C. § 2283, and the All Writs Act,28 U.S.C. § 1651.
[4] The appellees, numerous asbestos producers jointly represented by the Center For Claims Resolution (the "CCR") and named as defendants in both actions, assert that the district court may consider the merits of the proposed settlement agreement filed simultaneously with the federal class action complaint before the state court entertains theGoreplaintiffs' request for declaratory judgment, when such a declaration allegedly would threaten to undermine the district court's oversight of the settlement. Thus they argue that the injunction must continue to be maintained in aid of the district court's jurisdiction. Prior to the elimination of theGoreappellants' jurisdictional challenges, the CCR defendants had asserted that because the federal class action was going to afford theGoreplaintiffs an opportunity to "opt out," theGoreplaintiffs were required to await the establishment and commencement of the "opt out" period and to exercise that option before prosecuting their related state action. The future, but certain, opportunity to "opt out," they argued, dispelled any concerns of comity and federalism.
[5] In light of the district court's resolution of the serious challenges to its jurisdiction, our holding will turn on the application of the "necessary in aid of jurisdiction" exception to the Anti-Injunction and All-Writs Acts. We will also address the issues vitiated by the district court's October 6 and October 27, 1993 opinions because of their currency in our developing class action jurisprudence.
I.
A.
[6] On January 15, 1993, a class action complaint pursuant to Fed.R. of Civ.P. 23(b)(3), an answer and a stipulation of settlement were simultaneously filed in the United States District Court for the Eastern District of Pennsylvania. The complaint was brought on behalf of Edward M. Carlough and other named plaintiffs1representing the putative class consisting of
(a) All persons . . . who have been exposed in the United States . . ., either occupationally or through the occupational exposure of a spouse or household member, to asbestos or to asbestos-containing products for which one or more of the Defendants may bear legal liability and who, as of January 15, 1993, reside in the United States . . ., and who have not, as of January 15, 1993, filed a lawsuit for asbestos-related personal injury, or damage, orPage 195death in any state or federal court against the Defendant(s). . . .
(b) All spouses, parents, children, and other relatives . . . of the class members . . . who have not, as of January 15, 1993, filed a lawsuit for the asbestos-related personal injury, or damage, or death of a class member . . . in any state or federal court against the Defendant(s). . . .
[7] The "Carloughplaintiffs" seek recovery for asbestos-related personal injury caused by the exposure of members of the putative class to the asbestos and asbestos-containing products of the defendants, who are miners, manufacturers, distributors, and suppliers of asbestos or asbestos-containing products, and their predecessors-in-interest, jointly represented by the Center For Claims Resolution.2Upon the joint motions of the named plaintiffs and the CCR members, the district court issued a conditional class certification order for the class defined in the complaint for purposes of settlement on January 29, 1993. The certification order further indicated that notice to absent class members would be given as to the pendency of the federal class action and of their rights to exclude themselves from the class.
[8] On March 1, 1993, the district court issued a Rule to Show Cause and ordered a preliminary hearing on whether the action should be finally certified as a Rule 23(b)(3) class and whether the settlement was "fair, adequate and reasonable." The parties were directed to file with the Clerk memoranda of law and any other documents in support of their respective positions no later than March 19, 1993. Among the various motions and objections filed in response to the Rule to Show Cause were challenges to the district court's subject matter jurisdiction under Article III of the United States Constitution and under the federal diversity statute,28 U.S.C. § 1332, as well as challenges to the district court's personal jurisdiction over the parties.3Although these issues were resolved in the interim between the filing of the present appeal and the entering of our opinion and order in this matter, they were pending when the present appeal was taken.
[9] On March 17, 1993, Gregory Gore, a resident of West Virginia, William Ferrel, a resident of Ohio, and Michael and Lynn Conley, residents of Pennsylvania, filed a related asbestos class action complaint, in the state court of West Virginia, under West Virginia law on behalf of themselves and as representatives of a putative class of plaintiffs similarly situated.Gore et al. v.Amchem Products, Inc., et al.,C.A. No. 93-C-195 (Circuit Court of Monongalia County, West Virginia). This state class action, which names the same CCR defendants as in theCarloughfederal class action, was commenced prior to the impending "opt out" period of the federal action and prior to the district court's determination of its subject matter and personal jurisdiction, and seeks as relief a declaration that the proposedCarloughsettlement is unenforceable and not entitled to full faithPage 196and credit in the West Virginia courts and is not binding on members of the purported West Virginia class. It further seeks a declaration that theGoreplaintiffs are adequate representatives of the purported West Virginia class and are authorized to "opt out" of the purported federal class inCarloughon behalf of the entire West Virginia class. Finally, theGoreaction seeks compensatory damages for each member of the West Virginia class for injury caused by the defendants' conduct in violation of West Virginia law, as well as punitive damages. The class of persons defined in the West Virginia suit parallels that defined in the federalCarloughsuit, except that the West Virginia class is limited to persons whose claims are based on asbestos exposure occurring in West Virginia and is further limited to persons "who do not presently have a diagnosed medical condition related to asbestos."
[10] On April 12, 1993, the defendant members of the CCR sought a temporary restraining order and preliminary injunction enjoining the West Virginia plaintiffs, their attorneys, agents and employees, and the class they purport to represent, from taking any steps in the further prosecution of their state claim or from pursuing similar "duplicative" litigation in any other forum. A telephonic hearing was held two days later concerning CCR's motion, and a temporary restraining order was granted the following day, April 15, valid until April 25, 1993. In issuing the temporary restraining order, the court found that
[T]he CCR Defendants may suffer irreparable harm in the prosecution of theGoreaction as the relief prayed for is substantially preemptive in nature as it relates to the present [Carlough] case. Further, the court finds CCR Defendants have established a reasonable probability of success on the merits of their request for an injunction and that a [sic] there is a substantial possibility of harm to a multitude of other potential class members, and that the public interest favors the issuance of this temporary restraining order.
[11] Upon the expiration of the terms of the temporary restraining order, and upon a renewed motion for preliminary injunction, the district court extended the temporary restraining order through April 30, 1993 and scheduled a hearing on that date. After the hearing, the court further extended the temporary restraining order through May 5, 1993. When the extension expired, the district court granted a preliminary injunction, restraining and enjoining theGoreplaintiffs, their attorneys, agents and employees, and the class they purport to represent "from taking any steps in the prosecution of the [Gore] action and from initiating similar litigation in any other forum." TheGoreplaintiffs appealed this order. During the pendency of this appeal, the district court resolved the challenges to its subject matter jurisdiction, ruling in an October 6, 1993 opinion that it had Article III and28 U.S.C. § 1332subject matter jurisdiction over theCarloughclass action.4Shortly thereafter,Page 197on October 27, 1993, the district court approved the plan for dissemination and content of notice of the commencement of the federal action to all putative members of theCarloughplaintiff class.5
B.
[12] The district court grounded its authority for granting the preliminary injunction in the Anti-Injunction Act,28 U.S.C. § 2283(1970), and the All-Writs Act,28 U.S.C. § 1651(1988). The Anti-Injunction Act provides that:
A court of the United States may not grant an injunction to stay proceedings in a State court except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments.
[13] The All-Writs Act in part provides that:
The Supreme Court and all courts established by Act of Congress may issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law.
[14] In granting the injunction, the district court relied on the parallel "necessary in aid of jurisdiction" language of the two Acts and cited several cases in which federal courts have enjoined or upheld injunctions against absent class members who have initiated a duplicative state court suit, derived from the same matters pending in the federal district court.See, e.g.,In re Asbestos School Litigation,1991 WL 61156, 1991 U.S.Dist. LEXIS 5142 (E.D.Pa. April 16, 1991) (construing All-Writs Act and Anti-Injunction Act similarly, and holding that stay of state proceeding is "necessary in aid of jurisdiction" when parallel action would seriously impair federal court's flexibility and authority or opportunity to adjudicate as to theres),aff'dmem.,950 F.2d 723 (3d Cir. 1991);In re Baldwin United Corp.(Single Premium Deferred Annuities Ins. Litigation),770 F.2d 328(2d Cir. 1985) (injunction proper when multi-defendant opt out class action is so far advanced that it is equivalent to aresover which district court requires control, and potential for onslaught of duplicative state proceedings would seriously impair federal court's flexibility and authority);see also In reCorrugated Container Antitrust Litigation,659 F.2d 1332(5th Cir. 1981),cert. denied,456 U.S. 936, 102 S.Ct. 1993, 72 L.Ed.2d 456 (1982).
[15] The district court rejected theGoreplaintiffs' reliance on our prior holdings inIn re Real Estate Title and SettlementServices Antitrust Litigation,869 F.2d 760(3d Cir.)cert.denied,493 U.S. 821, 110 S.Ct. 77, 107 L.Ed.2d 44 (1989) and inIn re Glenn W. Turner Enterprises Litigation,521 F.2d 775(3d Cir. 1975). The court distinguished our reversal of the injunction inIn re Real Estate Titleon the ground that it involved an absent class member who wasdeniedthe opportunity to opt out and who also had never consented to jurisdiction, whereas theGoreplaintiffs were going to be afforded an opportunity to opt out of theCarloughaction. With regard toIn re GlennTurner,the district court's decision again turned on the state court plaintiffs' ability to opt out of the federal action. InIn re Glenn Turner,the successful appeal from the injunction order was brought by the State Attorney General, who as a non-class member, was not eligible to opt out of the federal action. We thus permitted him to maintain a collection suit in state court, which was commenced subsequent to a restitution judgment in state court, but prior to class certification in the related federal action. We held, however, that the injunction as against class members, who could opt out, was valid as a directivePage 198facilitating the efficient management of the federal class action. By analogy, the district court reasoned that once the opt out period is commenced in theCarloughaction, an unrealized but future certainty at the time the district court issued its order, theGoreplaintiffs would then be able to individually opt out ofCarloughand file claims for asbestos-related injuries against theCarloughdefendants in the forum of their choice, safeguarding policies of federalism and making theGoreaction unnecessary. The court characterized the sole purpose of theGoreaction as "preemptive" of the federal class action.
[16] In addition, the district court rejected theGoreplaintiffs' contentions that the federal court lacked personal jurisdiction, finding that the Federal Rules of Civil Procedure allow federal courts to bind absent class members in opt out class actions, even without minimum contacts, without impinging federal due process protections, and concluding that the injunction was "necessary to protect [its] jurisdiction" under the All-Writs Act and the Anti-Injunction Act.6
[17] Finally, the court held that issuance of the injunction enjoining absent class members was proper notwithstanding pending jurisdictional motions. CitingIn re Asbestos SchoolLitigation,1991 WL 61156, 1991 U.S.Dist. LEXIS 5142 (E.D.Pa. April 16, 1991) (presumption against injunction overcome despite pending jurisdictional issues where time and expense incurred by parties and court on settlement is great and absent class member failed to opt out). Without any preliminary discussion of its jurisdiction, the district court summarily stated that "if it is finally determined that this Court lacks jurisdiction, the injunction over theGoresuit will be lifted." App. at 529.
[18] The district court subsequently resolved the jurisdictional challenges and approved the plan for dissemination of notice to be implemented on November 1, 1993, and ending on December 27, 1993. The court set the deadline for opting out of the class for January 24, 1994, and set the final fairness hearing in theCarloughaction for February 22, 1994.
[19] We have jurisdiction to review a preliminary injunction granted by the district court.28 U.S.C. § 1292(a)(1). TheCarloughaction was brought in the federal district court pursuant to the diversity statute.28 U.S.C. § 1332. We will review whether the district court's issuance of the preliminary injunction was within the sound discretion of the court, or whether it was a clear error of law.Doran v. Salem Inn, Inc.,422 U.S. 922, 931-32, 95 S.Ct. 2561, 2567-68, 45 L.Ed.2d 648 (1975);Loretangeli v. Critelli,853 F.2d 186, 193 (3d Cir. 1988).
II.
[20] We discuss first the jurisdictional issues which we find resolved by the two orders of the district court entered subsequent both to the issuance of the preliminary injunction and to the appeal taken from that injunction. We note that neither the Anti-Injunction Act,28 U.S.C. § 2283(1970), nor the All-Writs Act,28 U.S.C. § 1651(1988), dispels the federal court's jurisdictional requisite or divests the West Virginia court of its jurisdiction to adjudicate theGoreaction, but rather the judicial authority extended by the Acts is wholly derivative in nature. Thus the application of the Anti-Injunction and All-Writs Acts should have beenprecededby the satisfaction of jurisdictional prerequisites.See Atlantic CoastLine R.R. Co. v. Brotherhood of Locomotive Engineers,398 U.S. 281, 287, 90 S.Ct. 1739, 1743, 26 L.Ed.2d 234 (1970) (exceptions to § 2283 should not be enlarged by liberal statutory construction). Nevertheless, we will recognize the district court's jurisdiction over theCarloughaction and theGoreplaintiffs in light of its belated October orders.
[21] Turning to the question of personal jurisdiction over theGoreplaintiffs, we recognizePage 199that it is a fundament of personal jurisdiction in a court of law that a defendant be actually domiciled or present within the territory of the forum court, without which the court would lack authority to bind that defendant.International Shoe Co. v.Washington,326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). Though this standard has been elaborated, and to some extent relaxed, particularly to befit the practical realities of the modern corporate entity and to reflect the replacement of thecapias ad respondendumwith personal service of process and modern forms of notice, it remains beyond cavil, as a general principle of jurisdictional authority, that "in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'"Id.(citations omitted).International Shoearose in the state court system and the opinion expressed the due process guarantees of the Fourteenth Amendment; nonetheless, the minimum contacts requirement for personal jurisdiction applies to federal courts having subject matter jurisdiction on the basis of diversity of citizenship as well as cases brought on the basis of a federal claim.See In re Real Estate Title,869 F.2d 760, 766 n. 6 (3d Cir. 1989). Thus, it would offend the Fifth Amendment's guarantee of due process for a federal court to enjoin an absentee class member whose minimum contacts with the forum have not been established or, in lieu of minimum contacts, who has not consented to the court's jurisdiction, explicitly or inferentially.
[22] InPhillips Petroleum Co. v. Shutts,472 U.S. 797, 105 S.Ct. 2965, 86 L.Ed.2d 628 (1985), the Supreme Court held that a court may bind an absentplaintiffclass member to a class action damages judgment, despite the absentee's lack of minimum contacts with the forum, without abrogating minimal due process protection.472 U.S. 797at 811-12, 105 S.Ct. at 2974-75. The absentee plaintiff class member's due process rights would be satisfied if the plaintiff received reasonable notice, an opportunity to be heard and to meaningfully partake in the litigation, adequate representation, and "at a minimum . . . an opportunity to remove himself from the class by executing and returning an `opt out' or `request for exclusion' form to the court."Id.at 812, 105 S.Ct. at 2975. The Court justified the relaxation of the minimum contacts standard for personal jurisdiction as applied to absent plaintiffs by adverting to the relatively less onerous burdens placed by a state on an absent plaintiff class member as compared to those placed on an absent defendant.Id.at 808, 105 S.Ct. at 2973. A plaintiff class member who is afforded an opportunity to opt out, but who fails to exercise that option, may be deemed to have consented to jurisdiction.Id.at 812, 105 S.Ct. at 2975. As we noted inInre Real Estate Title,"[t]he procedural protections of Fed.R.Civ.P. 23 replace the rigid rules of personal jurisdiction in this context and are all that is needed to meet the requirements of due process."869 F.2d 760, 766 (3d Cir. 1989) (footnote omitted.)
[23]In re Real Estate Titleafforded us an opportunity to examineShuttsand to reaffirm the critical importance of the right to opt out in drawing any inference of consent to jurisdiction by absent plaintiff class members who otherwise would have no affiliation with the forum. We held that
[I]f the member has not been given the opportunity to opt out in a class action involving both important injunctive relief and damage claims, the member must either have minimum contacts with the forum or consent to jurisdiction in order to be enjoined by the district court that entertained the class action.
[24]In re Real Estate Title,869 F.2d at 769. Because neither the opportunity to opt out (or any indicia of consent) nor minimum contacts were present, we held that the federal district court was not authorized to enjoin a state court damages suit brought by two state school boards, the absent plaintiffs in the related federal multi-district class action, against title insurance companies, the defendants in both the federal and state actions,Page 200for violations of state antitrust law.7We confirmed that the traditional minimum contacts requirement applies to enjoining a plaintiff who hasnotbeen allowed to opt out of a class action.See also Compagnie des Bauxites de Guinea v. InsuranceCompany of North America,651 F.2d 877, 880 (3d Cir. 1981) (district court must have personal jurisdiction over party before it can enjoin actions) (citingZenith Radio Corp. v. HazeltineResearch, Inc.,395 U.S. 100, 112, 89 S.Ct. 1562, 1570, 23 L.Ed.2d 129 (1969)),aff'd sub nom Insurance Corp. of Ireland,Ltd. v. Compagnie des Bauxites de Guinea,456 U.S. 694, 102 S.Ct. 2099, 72 L.Ed.2d 492 (1982).
[25] As inIn re Real Estate Title,the present case was distinguishable fromShuttsduring the interim when the absent class plaintiffs had not yet been notified and the opt out period had not yet been established in that theGoreplaintiffs had not yet been afforded the opportunity to opt out — an essential component of personal jurisdiction in lieu of the more traditional minimum contacts. The lack of personal jurisdiction over theGoreplaintiffs at that time is further evidenced in the record by clear indications that theGoreplaintiffs did not consent to the district court's jurisdiction. Not only did theGorecomplaint expressly indicate the desire to be excluded from the federal action, but theGoreplaintiffs had not received notice of theCarloughproceedings prior to the motions to enjoin their state court actions.Cf. Battle v.Liberty Nat. Life Ins. Co.,877 F.2d 877, 883 (11th Cir. 1989) (after Fed.R.Civ.P. 23(b)(3) notice had been effected on about 90% of class, district court properly issued injunctive order pursuant to Anti-Injunction Act). Although an inference of consent might have been drawn from silence or inaction after notice and the running of the opt out period,Shutts,472 U.S. at 806-14, 105 S.Ct. at 2971-75, we find no precedent for assuming consent prior to notice and the commencement of the opt out period.8Thus, with neither express or inferred consent, nor minimum contacts, and prior to notice and the commencement of the opt out period, the district court did not have personal jurisdiction over theGoreplaintiffs and did not have authority to bind their actions when it issued the injunction. In short, the district court's pre-notice, pre-opt out period injunction was premature.
[26] We do not believe that the mere promise, even certain eventuality, that the opportunity to opt out of the class will be offered to absent class plaintiffs satisfies the requirements of due process as defined byShutts.There the Supreme Court specifically required that "an absent plaintiff be provided with an opportunity to remove himself from the class by executing and returning an `opt out' or `request for exclusion' form to the court." 472 U.S. at 812, 105 S.Ct. at 2974. Because of this emphasis by the Supreme Court on thereceiptof the opt out forms, we reject the district court's implication here that the opt out requirement is satisfied in all cases where a class action will provide for the opportunity to opt out.Page 201
[27] Thus, prior to notice and the opt out period, and absent minimum contacts with the Pennsylvania forum or consent to its jurisdiction, a federal injunction enjoining state action would violate due process.See In re Real Estate Title,869 F.2d at 762. Strictly and narrowly enforcing the requisite opportunity to opt out for Rule 23 class plaintiffs before exerting personal jurisdiction comports with the overall class action mechanism and is derived from policy considerations bearing upon comity and federalism. Here the district court's premature issuance of the injunction threatened to compromise these principles. Nevertheless, once the district court approved the dissemination of notice and commenced the opt out period pursuant to its October 27, 1993 order, the jurisdictional problem was resolved. Thus, despite the district court's initial jurisdictional overreach, we will recognize its legitimate exercise of personal jurisdiction over theGoreappellants.
III.
[28] As with personal jurisdiction, the district court was obliged to ascertain, at least in a preliminary fashion, its own subject matter jurisdiction over theCarloughcase before issuing an injunction in aid of that jurisdiction. Without this preliminary determination, the court should not have adverted to the Anti-Injunction Act or the All-Writs Act for authority to issue the injunction, especially in light of the fact that serious challenges to the court's Article III jurisdiction inCarloughwere pending at time the court enjoined theGoreplaintiffs.Cf. Atlantic Coast Line,398 U.S. at 295, 90 S.Ct. at 1747 (stating that "if the District Court does have jurisdiction," it may issue an injunction which is"necessary in aid of"that jurisdiction);In re Baldwin-United Corp.,770 F.2d at 335 ("When a federal court has jurisdiction over its case in chief, . . . the All-Writs Act grants it ancillary jurisdiction to issue writs `necessary or appropriate in aid of' that jurisdiction"). The district court's opinion in support of its preliminary injunction did not indicate any such initial determination with regard to its subject matter jurisdiction, although the court thoroughly addressed the matter in its October 6, 1993 opinion.
[29] We appreciate that an initial jurisdictional inquiry may indicate the need for extensive discovery, which, if undertaken prior to examining whether an injunction is necessary in aid of the court's jurisdiction, could hinder the efficient resolution of the case. A court may need to act promptly to safeguard its jurisdiction in the face of interference by parallel actions brought in a state court. In cases in which complex jurisdictional issues have been raised, the initial jurisdictional determination need not await extensive discovery, but may be based on the information reasonably and immediately available to the court.Cf. Industrial Electronics Corp. v.Cline,330 F.2d 480, 482 (3d Cir. 1964) (where jurisdictional issues raised in context of Rule 65 motion for preliminary injunction, movant must establish "reasonable probability of ultimate success upon the question of jurisdiction when the action is tried on the merits");see Schell v. Food MachineryCorp.,87 F.2d 385, 387 (5th Cir.) ("A federal court may sometimes enjoin proceedings in a state court to protect its own jurisdiction lawfully acquired, but may not interfere even temporarily when it has none"),cert. denied,300 U.S. 679, 57 S.Ct. 670, 81 L.Ed. 883 (1937). Although the district court did not make this initial jurisdictional determination, in light of its in-depth resolution of the matter in its October 6, 1993 opinion, we will recognize the court's subject matter jurisdiction over theCarloughaction.
IV.
[30] Having determined that the district court satisfactorily, albeit belatedly, ascertained its jurisdictional authority, we turn now to the remaining question of the propriety of the court's application of the "necessary in aid" exception to the Anti-Injunction and All-Writs Acts.9Page 202
[31] InIn re Glenn Turner,521 F.2d 775(3d Cir. 1975), we examined the "necessary in aid of the court's jurisdiction" exception to the Anti-Injunction Act. There the Attorney General instituted a collection suit in a state court following a money judgment and just days after the federal district court had certified the federal class action. Nevertheless, execution upon the state court judgment was effectively enjoined by order of the district court, purportedly by authority of the Anti-Injunction Act. In reversing the injunction of the district court, we reiterated that for the "necessary in aid of jurisdiction" exception to apply, "`it is not enough that the requested injunction is related to that jurisdiction, but it must be "necessary in aid of" that jurisdiction.'"In re GlennTurner,521 F.2d at 780 (citingAtlantic Coast Line R.R. Co.,398 U.S. 281, 295, 90 S.Ct. 1739, 1747, 26 L.Ed.2d 234 (1970)). We noted that the exception authorizing injunctions necessary in aid of the court's jurisdiction applies only "`to prevent a state court from so interfering with a federal court's consideration or disposition of a case as to seriously impair the federal court's flexibility and authority to decide that case.'"Id.Finally, we held that Fed.R.Civ.P. 23(b)(3) does not prohibit state proceedings when an action for the same cause is pending in federal court. In recognition of the independence and equivalent stature of the state and federal courts, we held that actions derived from the same cause against the same defendants may be maintained simultaneously in federal and state court. The effect of a judgment in one would be determined by the principle of res judicata.In re Glenn Turner,521 F.2d at 780-81 (citingKlinev. Burke Constr. Co.,260 U.S. 226, 43 S.Ct. 79, 67 L.Ed. 226 (1922);Jos. L. Muscarelle, Inc. v. Central Iron Mfg. Co.,328 F.2d 791(3d Cir. 1964)). Moreover, we held that the state citizens on whose behalf judgment was entered in state court "were not proper members of the [federal] class by virtue of the state judgment, rendering unnecessary their opting out before the district court finally determined the class membership."In reGlenn Turner,521 F.2d at 781.
[32] Thus, simultaneous federal and state adjudications of the same in personam cause of action do not of themselves trigger the necessary in aid exception, and the letter and spirit of the Anti-Injunction Act and All-Writs Act counsel a restrictive application of that exception. The Supreme Court has cautioned, in deference to principles of federalism, that
[a]ny doubts as to the propriety of a federal injunction against state court proceedings should be resolved in favor of permitting the state courts to proceed in an orderly fashion to finally determine the controversy. The explicit wording of § 2283 itself implies as much, and the fundamental principle of a dual system of courts leads inevitably to that conclusion.
[33]Atlantic Coast Line R.R. Co.,398 U.S. 281, 297, 90 S.Ct. 1739, 1748, 26 L.Ed.2d 234 (1970).
[34] Despite the deference paid to the independence of the state courts and principles of comity, there are instances in which courts of appeals have determined that state actions must be enjoined to allow the federal court to proceed ably with pending matters. We find the standard enunciated in these cases in which the courts have upheld issuance of "necessary in aid of" injunctions persuasive and relevant here.
[35] InIn re Asbestos School Litigation,1991 WL 61156, 1991 U.S.Dist. LEXIS 5142 (E.D.Pa. April 16, 1991),aff'd mem.,950 F.2d 723 (3d Cir. 1991), we affirmed without an opinion, a district court's issuance of an injunctionPage 203prohibiting absent class members from pursuing a state court asbestos property damage suit which duplicated a federal school property class action. There, after an absent member in the federal class action failed to opt out, it filed a state court suit against a group of defendants seeking relief corresponding to that in the action pending in federal court. Several of the defendants requested that maintenance of the state court suit be enjoined. Adverting to the complexity of the federal class action and its impending settlement, the court granted the injunction on the ground that the state action so impeded the prosecution of the federal action as to warrant resort to the "necessary in aid" exception.
[36] Our sister circuits have also identified impending and finalized settlements in federal actions as justifying "necessary in aid of jurisdiction" injunctions of duplicative state actions. InIn re Baldwin United Corp.,770 F.2d 328(2d Cir. 1985), a consolidated MDL proceeding, over 100 lawsuits were brought against 26 defendants by holders of securities. After years of negotiations, many defendants agreed to a settlement and signed stipulations to that effect. Prior to the entry of final judgment approving the settlements, the attorneys general of several states made known their intent to commence enforcement suits in their state courts seeking restitution and other damages against some of the defendants. The district court enjoined the imminent state proceedings under the necessary in aid exception to the All-Writs Act, explaining:
that the existence of actions in the state court would jeopardize its ability to rule on the settlements, would substantially increase the cost of litigation, would create a risk of conflicting results, and would prevent the plaintiffs from benefitting from any settlement already negotiated or from reaching a new and improved settlement in federal court.
[37]Id.at 333.
[38] The Court of Appeals for the Second Circuit affirmed, adding that.
[t]he existence of multiple and harassing actions by the states could only serve to frustrate the district court's efforts to craft a settlement in the multi-district litigation before it.
* * * * * *
Under the circumstances we conclude that the injunction . . . was . . . unquestionably "necessary or appropriate in aid of" the federal court's jurisdiction.
[39]Id.at 337-38.See also In re Corrugated Container AntitrustLitigation,659 F.2d 1332(5th Cir. 1981),cert. denied,456 U.S. 936, 102 S.Ct. 1993, 72 L.Ed.2d 456 (1982) (state court proceeding halted to protect federal jurisdiction over imminent settlement);Battle v. Liberty National Life Ins.,877 F.2d 877, 882 (11th Cir. 1989) (collateral state proceedings enjoined under necessary in aid exception);James v. Bellotti,733 F.2d 989, 994 (1st Cir. 1984) (provisionally improved settlement may justify protective injunction against state court suits).
[40] Here the prospect of settlement was indeed imminent, as in other cases in which federal courts have issued injunctions. Additionally, as the district court found, the nature of theGoresuit provides further justification for the injunction. TheGoreplaintiffs are not requesting relief strictly parallel to that sought in the federal forum. Rather than requesting damages for exposure to asbestos, the stated purpose of theGoresuit is to challenge the propriety of the federal class action, which the district court characterized as a preemptive strike against the viability of the federal suit, and to obtain rulings from the West Virginia state court regarding the West Virginia class members' right to opt out of the federal action. In addition.Carloughis an opt out federal class action posing no impediment to theGoreplaintiffs' individual exercise of their opt out right and option to commence their own respective lawsuits in the forum of their choice.Cf. In re Real EstateTitle,869 F.2d 760, 769 (injunction not proper where no opportunity to opt out);In re Glenn Turner,521 F.2d 775, 778-79 (injunction precluded for non-class members but not precluded as against members of an opt out class where necessary to orderly and efficient federal class management). Thus, we agree with the district court findings that judicial precedent as well as the preemptivePage 204cast of theGoresuit and the recent establishment of the opt out period overcome the reluctant disposition of the courts to issue a necessary in aid injunction.
[41] We hold that given the establishment of an opt out period and theGoreplaintiffs' ability to opt out, it is within the sound discretion of the district court to enjoin their action in state court. TheGoreplaintiffs individually are at liberty to pursue litigation of their asbestos-related injury claims in the forum of their choice. This ability abrogates any argument of theGoreplaintiffs that their West Virginia rights are not adequately addressed by the federal court settlement. Injunction of that portion of theGoresuit seeking a ruling from the West Virginia court permitting a mass opting out of all West Virginia plaintiffs is also necessary in aid of the district court's jurisdiction. At this mature phase of the settlement proceedings and after years of pre-trial negotiation, a mass opting out of West Virginia plaintiffs clearly would be disruptive to the district court's ongoing settlement management and would jeopardize the settlement's fruition. In addition, a mass opting out presents a likelihood that the members of the West Virginia class will be confused as to their membership status in the dueling lawsuits. All members of theGoreclass are only now receiving notice of the federal suit. A declaration by the West Virginia court at this time that all West Virginia members of the federal class are now in the West Virginia suit (and we make no comment as to the legal authority of the West Virginia court to so rule) could cause havoc.
[42] We note also that litigating the propriety of the federal settlement in West Virginia would subject the CCR defendants to unnecessarily duplicative and costly efforts when a fairness hearing has already been scheduled in the district court. Although there is no prohibition against related causes of action being adjudicated in both state and federal forums, two actions here would unduly burden the defendants.
[43] We find it difficult to imagine a more detrimental effect upon the district court's ability to effectuate the settlement of this complex and far-reaching matter than would occur if the West Virginia state court was permitted to make a determination regarding the validity of the federal settlement. Challenges that the settlement violates West Virginia law can be presented to the district court, and those plaintiffs wishing to preserve their claims for West Virginia adjudication may opt out of the federal class.
[44] Given the concerns of the district court to finalize the settlement and given the time invested in reaching that goal, we find that the district court did not abuse its discretion in determining that the injunction should issue. We will, therefore, affirm the order of the district court granting preliminary relief in favor of the defendants.
V.
[45] The order of the district court of May 6, 1993 enjoining theGoreplaintiffs, their attorneys, agents and employees, and the class they purport to represent from taking any further steps in the prosecution of their claims in the Circuit Court of Monongalia County, West Virginia, or from initiating similar litigation in any other forum, is affirmed.Page 968
- Pursuant to F.R.A.P. Rule 12(a). ↩
- The named plaintiffs are Edward M. Carlough; Pavlos Kekrides and Nafssica Kekrides; Laverne Winbun; Ambrose Vogt, Jr. and Joanne Vogt; Karlos Raver and Dorothy M. Raver; John A. Baumgartner and Anna Marie Baumgartner; Timothy Murphy and Gay Murphy; Ty T. Annas; Fred Angus Sylvester. ↩
- The CCR defendants are Amchem Products, Inc.; A.P. Green Industries, Inc.; Armstrong World Industries, Inc.; Certainteed Corporation; C.E. Thurston Sons, Inc.; Dana Corporation; Ferodo America, Inc.; Flexitallic, Inc.; GAF Building Materials Corporation; I.U. Northamerica, Inc.; Maremont Corporation; National Gypsum Company; National Services Industries, Inc.; NOSROC Corporation; Pfizer, Inc.; Quigley Company, Inc.; Shook Fletcher Insulation Company; T N, plc; Union Carbide Chemicals and Plastics and United States Gypsum Company. ↩
- Among the pleadings filed in response to the Rule to Show Cause were:
(1) Motion to dismiss claims of plaintiffs Carlough, Vogt, Murphy, and Annas for lack of subject matter jurisdiction and for failure to state a claim, or in the alternative, motion for partial decertification filed by plaintiffs represented by Baron Budd, C.A. No. 93-0215, United States District Court for the Eastern District of Pennsylvania, March 16, 1993.
(2) Motion to dismiss for lack of jurisdiction under the doctrine of feigned and collusive cases filed by plaintiffs represented by Baron Budd, C.A. No. 93-0215, United States District Court for the Eastern District of Pennsylvania, March 16, 1993.
(3) Motion to dismiss for lack of case or controversy filed by plaintiffs represented by Henderson Goldberg, C.A. No. 93-CV-0215, United States District Court for the Eastern District of Pennsylvania, March 17, 1993.
(4) Objections to class certification and approval of the stipulation of settlement filed by plaintiffs represented by Henderson Goldberg, C.A. No. 93-CV-0215, United States District Court for the Eastern District of Pennsylvania, March 16, 1993.
↩ - In an opinion of more than 50 pages, the district court dispelled the various challenges to its Article III jurisdiction, its statutory diversity jurisdiction, allegations of collusion between the named parties, as well as the allegation that the case is moot. In a nutshell, the district court held the following:
1. While many members of theCarloughclass are "exposure-only" plaintiffs, with no measurable or diagnosable manifestation of asbestos related injury, the potential for asbestos-related illness to manifest in "exposure-only" plaintiffs is enough to satisfy the "injury in fact" requirement of Article III standing. Thus, the court has subject matter jurisdiction regardless of the legal significance of the "injury in fact" sustained by the exposure-only plaintiffs.
2. When punitive damages are included, the amount in controversy for exposure-only plaintiffs is not clearly less than the statutory requisite of section 1332 diversity jurisdiction. Hence, diversity jurisdiction is not destroyed. Furthermore, a settlement for less than the $50,000 statutory requisite does not destroy diversity jurisdiction.
3. Collusion or feigned adversity may not be inferred to exist between the parties merely from the fact that the complaint and settlement were filed simultaneously, inasmuch as prefiling settlement negotiations do not evidence "friendly" law suits and theCarloughsettlement was, at any rate, a contingent proposal between adverse parties. The fact that the CCR defendants agreed to pay class counsel fees is also no indication of collusion, but is rather standard. Thus, the "case or controversy" requirement of Article III is met.
4. TheCarloughcase is not mooted by the proposed settlement because the proposed settlement, is, of course, contingent on the court's approval.
↩ - On October 29, 1993, 1993 WL 441720, the district court entered a memorandum and order denying the motions of certain objectors for certification of various orders for interlocutory appeal of the January 29, 1993 order conditionally certifying theCarloughclass pursuant to28 U.S.C. § 1292(b) and for stay of the district court's order of October 27, 1993 approving the content of notice and the dissemination scheme. The objectors then filed an emergency motion to stay the October 27, 1993 order, as well as a petition for mandamus directing vacatur of the October 6, 1993 order (subject matter jurisdiction) and the October 27, 1993 order (notice). The emergency motion to stay was denied, and the objectors filed a motion for leave to withdraw the petition for writ of mandamus on November 1, 1993. ↩
- TheGoreplaintiffs had further argued that the CCR defendants did not meet the prerequisites for equitable relief under Fed.R.Civ.P. 65. The court dismissed that claim, concluding that the "prerequisites for equitable relief under Rule 65 do not apply to the preliminary injunction requested in this case." Although theGoreplaintiffs reassert in this appeal their argument that Fed.R.Civ.P. 65 applies to the preliminary injunction in question, we decide this case on other grounds and hence do not reach this issue. ↩
- We further noted inIn re Real Estate Titlethat, despite the federal court's inability to enjoin the state action, the settlement of the federal class action would still have value to the title companies. We noted that the settlement afforded the title companies the defense that the school boards were precluded from proceeding with the state court on the ground that they were bound to the settlement. In turn, we noted that the school boards could claim inadequate representation in the federal class action, or perhaps raise other due process claims which would invalidate the settlement as to themselves. If the school boards could demonstrate either that they were not members of the federal class, or that the federal proceeding did not comply with due process guarantees, then the state court action would not be prohibited by the terms of the federal class action settlement. ↩
- It might have been persuasive, as we conjectured inIn reReal Estate Title,that "in a hybrid class action that involves important injunctive and damage components, a defendant need only consent to a class certification that allows for opt outs in order to avoid due process challenges to the settlement in multiple fora, as long as the court approves that certification."In re Real Estate Title,869 F.2d at 770. But facing the issue squarely in the present case, we find no reason to relax the jurisdictional requisite to a binding in personam judgment beyondShuttsand other precedent, which allow an inference of consent to jurisdiction where an absent plaintiff class member is notified and fails to exercise the opt out prerogative. ↩
- The All-Writs Act,28 U.S.C. § 1651, provides:
(a) The Supreme Court and all courts established by Act of Congress may issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law.
The Anti-Injunction Act,28 U.S.C. § 2283, states that:A court of the United States may not grant an injunction to stay proceedings in a state court except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments.
The two statutes act in concert to permit issuance of an injunction. While the Anti-Injunction Act does not provide positive authority for issuance of injunctions, it describes those situations where injunctions are not permitted. The All-Writs Act, by contrast, grants the federal courts the authority to issue injunctions where necessary in aid of their jurisdiction. The parallel "necessary in aid of jurisdiction" language is construed similarly in both the All-Writs Act and the Anti-Injunction Act.See In re Asbestos School Litigation,1991 WL 61156, 1991 U.S.Dist. LEXIS 5142 (E.D.Pa. April 16, 1991),aff'd mem.,950 F.2d 723 (3d Cir. 1991). ↩