In Re Diet Drugs (Phentermine/Fenfluramine/Dexfenfluramine) Products Liability Litigation

Opinions of the United

2004 Decisions States Court of Appeals

for the Third Circuit

5-25-2004

In Re: Diet Drugs

Precedential or Non-Precedential: Precedential

Docket No. 02-4582

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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