Opposition Brief — Coulter v. Metropolitan Life Insurance

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Supreme Court, U.S.

EIJLED

JUL 24 1997

IN THE CLERK

Supreme Court of the Anited States

OCTOBER TERM, 1996

RONALD COULTER, ET AL.,

Petitioners,

METROPOLITAN LIFE INSURANCE COMPANY,

Respondent.

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

BRIEF OF RESPONDENT

METROPOLITAN LIFE INSURANCE COMPANY

IN OPPOSITION TO THE PETITION

PATRICE SMILEY ANDREWS LORNA G. SCHOFIELD*

Metropolitan Life Insurance Company Debevoise & Plimpton

One Madison Avenue 875 Third Avenue

New York, New York 10010 New York, New York 10022

(212) 578-4935 (212) 909-6000

Attorneys for Respondent

Metropolitan Life Insurance Company

July 14, 1997 *Counsel of Record

QUESTIONS PRESENTED

In the wake of a federal class action settlement in another

court, the District Court below exercised its discretion under 28

U.S.C. § 1404(a) to transfer four civil actions involving apparent

settlement class members to the federal court that previously had

approved the settlement, had retained jurisdiction to enforce its final

judgment, and had enjoined related litigation in other forums. The

Court of Appeals denied without comment the petitions for

extraordinary writs of mandamus to vacate the interlocutory,

discretionary transfer orders. The certiorari petition in this Court

raises two questions:

Did the Court of Appeals abuse its discretion in declining to issue

extraordinary writs of mandamus to vacate the District Court’s

exercise of its discretion to transfer these actions to the forum of

a related class action despite petitioners’ assertion of a due-

process right to “collaterally attack” the class action judgment in

the forum of their choice, where the transfers will not prevent

petitioners from “collaterally attacking” that judgment?

Did the Court of Appeals abuse its discretion in declining to issue

the extraordinary writs of mandamus despite petitioners’

contention that the McCarran-Ferguson Act requires application

of Pennsylvania law to their claims, even though the District

Court’s transfer orders have no effect on applicable choice-of-law

rules and the transferee court can apply Pennsylvania law to the

extent appropriate?

LIST OF PARTIES BELOW AND

LIST OF PARENT COMPANIES AND SUBSIDIARIES

Other than the parties listed in the petition, the parties in the

lower courts include plaintiffs Christopher Clancy and Beth Raible

and defendants James D. Spangler, Jeffrey J. Rodgers and Robert

Martini.

Respondent Metropolitan Life Insurance Company

(“MetLife”) has no parent company. MetLife directly or indirectly

owns for its own account at least 10% but less than 100% of the

outstanding voting stock of the following publicly-traded companies:

Chart House Enterprises, Inc.

Lone Star Industries, Inc.

New England Investment Companies, L.P.

MetLife also directly or indirectly owns for its own account at least

10% but less than 100% of the outstanding voting stock of the

following companies:

AEW Advisors, Inc.

AEW Capital Management, Inc.

AEW Capital Management, L.P.

AEW Hotel Investment Corporation

AEW Hotel Investment Limited Partnership

AEW Investment Group, Inc.

AEW Real Estate Advisors, Limited Partnership

AEW Securities, L.P.

Aldrich Eastman Global Investment Strategies, LLC

Back Bay Advisors, Inc.

Back Bay Advisors, L.P.

BBC Investment Advisors, Inc.

BBC Investment Advisors, L.P.

Blodgett Holdings, Inc.

Briggs Holdings, Inc.

Briggs Plumbing Products, Inc.

Capital Growth Management Limited Partnership

iii

Chart House Enterprises, Inc.

Cloverleaf Properties, Inc.

Coating Technologies International, Inc.

Copley Management Advisors, L.P.

Copley Properties Company, Inc.

Copley Properties Company II, Inc.

Copley Properties Company III, Inc.

Copley Public Partners Holding, L.P.

Copley Securities Corporation

Copley/Orchard Investors, Inc.

Copley/Orchard Investors, L.P.

CREA Investors/Santa Fe Springs, Inc.

CREA Western Investors I, Inc.

CREA Western Investors, L.P.

CTR Corp.

Dan River, Inc.

Eclipse Claim Services Inc.

Eighth Copley Corp.

Fifth Copley Corp.

Fifth Singleton Corp.

First Income Corp.

Fourth Copley Corp.

Fourth Income Corp.

Fourth Singleton Corp.

Frialator International, Limited

Genesis Seguros Generales, Sociedad Anonima de Seguros y

Reaseguros

Graystone Partners, Inc.

Graystone Partners, L.P.

GS Blodgett Corporation

GS Blodgett International Ltd.

HACO Corp.

Harris Associates, Inc.

Harris Associates Securities, L.P.

Interbroker, Correduria de Reaseguros, S.A.

Kolon-Met Life Insurance Company

Lone Star Industries, Inc.

Loomis, Sayles & Company, Inc.

Loomis, Sayles & Company, L.P.

Luther’s Bar-B-Q’, Inc.

Magikitch'n, Inc.

MC Management, Inc.

MC Management, L.P.

Mecca Software, L.L.P.

Mercadian Capital L.P.

Mercadian Funding L.P.

Met Life International Real Estate Equity Shares, Inc.

Metric Apartment Co-Investment Trust, Inc.

Metric Colorado, Inc.

Metric Institutional Apartment Fund II, L.P.

Metropolitan Structures

Morguard Investments Limited

Nailite International Inc.

NEF Corporation

NEIC Holdings, Inc.

New England Funds, L.P.

New England Funds Management, L.P.

New England Investment Associates, Inc.

New England Investment Companies, L.P.

Origenes AFJP S.A.

Pesco Plus, L.C.

Pitco Frialator, Inc.

Public Employees Equities Services Company

R&T Asset Management, Inc.

Reich & Tang Asset Management, Inc.

Reich & Tang Asset Management, L.P.

Reich & Tang Distributors, L.P.

Reich & Tang Services, L.P.

Santander Met, S.A.

Second Income Corp.

Seventh Copley Corp.

Sixth Copley Corp.

Sixth Singleton Corp.

Seguros Genesis, S.A. (Mexico)

Seguros Genesis, $.A. (Spain)

Third Income Corporation

Third Singleton Corporation

Vaughan, Nelson, Scarborough & McConnell, L.P.

VNSM, Inc.

Westpeak Investment Advisors, Inc.

Westpeak Investment Advisors, L.P.

TABLE OF CONTENTS

PAGE

QUESTIONS PRIEGEMTED 2. ckccnccisaevtbeeea es. i

LIST OF PARTIES BELOW AND LIST OF PARENT

COMPANIES AND SUBSIDIARIES ................. ii

TABLE GP COGIC Ge 3 Ses Sk Re os vs vi

TABLE GP GRPUGRIONE a 5 5 Sion KE 8s ae ix

STATUTES AND OTHER PROVISIONS INVOLVED ...... l

STATEDGENE GP FRG 6 ca ee eee es ki ews l

A. Background of the Florida Class Action........ 2

1. The Horton Settlement Agreement ....... 3

2. The Coulters’ Participation in the

i RE ee ee 4

3 The Final Judgment and Injunction in

PE ee eee 4

4 Denial of the Behrend Firm’s Horton

ay RN PR ee ee 5

5. The Behrend Firm's Horton Appeals ..... 7

B. — Background of the Behrend Firm's Pennsylvania

A er. oe ye are 7

1. Clr ©: GE 6. na ON i ee eee 7

Vii

2. a 5s ee ere eee 8

3. ee eee eee eee e 9

4. PO er eee 10

ee ee eee 10

DD. FRR RR PS iw ww ee 12

REASONS FOR DENYING THE WRIT .............. 13

5. THE DISTRICT COURT’S DISCRETIONARY

TRANSFER ORDERS PRESENT NO IMPORTANT

QUESTION OF LAW WARRANTING = THIS

ee A eee Sa ee 13

A. The Due Process Clause Does Not Guarantee

Petitioners an Unrestricted Choice of Venue for

re os sn 2 os 14

B. The McCarran-Ferguson Act Did Not Require

the District Court to Deny the Transfer Motions . 16

II. ©THE COURT OF APPEALS ACTED WITHIN ITS

DISCRETION IN DENYING MANDAMUS TO

REVIEW THE DISCRETIONARY TRANSFER

We kee fan oes AK Ro ene we sees 17

Ill. PETITIONERS’ ATTACK ON THE HORTON

JUDGMENT IS IMPROPER, IRRELEVANT AND

eee. — eee 20

A. | The Horton Judgment Is Not Properly Before

I a kas yaw ws one vce oe es 20

Viii

B. Res Judicata Precludes Petitioners’ Attack on the

eS PCY ee eee eee eee 21

C. The McCarran-Ferguson Act Did Not Bar the

OS ee ree 25

D. ° Petitioners’ Other Attagk§ on the Horton

Settlement Are Also Bggeless.............. 27

[PONE he a Aes ale a ee SE ein le areas 28

FS, iad CA at 2 a eas O64 oa ee aes la

TABLE OF AUTHORITIES

PAGE

Cases:

In re “Agent Orange” Product Liability Litigation, 996

F.2d 1425 (2d Cir. 1993), cert. denied, 510 U.S.

se gaa et eta Shas wo ee 40 60 15, 19

Allied Chemical Corp. v. Daiflon, Inc., 449 U.S. 33

CS ASE. hs ibaa ds CAS SOA DUCE oss 17

Amchem Products v. Windsor, No. 96-270, 1997 U.S.

fo fe. | Ca 27, 28

In re American Medical Systems, 75 F.3d 1069 (6th Cir.

Se Sie. is A Shin old'G Re Se. 27

Carver v. Knox County, 887 F.2d 1287 (6th Cir. 1989),

cert. denied, 495 U.S. 919 (1990) ............-.- 19

Castano v. American Tobacco Co., 84 F.3d 734 (Sth

Ge aeeea, ees oe eee A ac... 26

Class Plaintiffs v. City of Seattle, 955 F.2d 1268 (9th

Cir.), cert. denied, 506 U.S. 953 (1992) .......... 26

Cotton v. Hinton, 559 F.2d 1326 (Sth Cir. 1977) ......... 26

Dailey v. Metropolitan Life Insurance Co., No. 1:97-

0008-RV-S (S.D. Ala. June 13, 1997) ............ 19

Federated Department Stores v. Moitie, 452 U.S. 394

SRG RES) ait ta) Soe a ae 24

Georgine v. Amchem Products, 83 F.3d 610 (3d Cir.

1996), aff'd sub nom. Amchem Products v.

Windsor, No. 96-270, 1997 U.S. LEXIS 4032

Game ay Seen be Sees ee ee se. 27

Gregory-Portland Independent School District v. Texas

Education Agency, 576 F.2d 81 (5th Cir. 1978),

cert. denied, 440 U.S. 946 (1979) .............. 19

Grilli v. Metropolitan Life Insurance Co. , 78 F.3d 1533

(11th Cir.), clarified, 92 F.3d 1074 (11th Cir.),

cert. denied sub nom. Coulter v. Metropolitan

Life Insurance Co., 117 S. Ct. 608 (1996), reh’g

denied, 117 S. Ct. 1121 (1997) 2... ...... 2, 4, 6, 7, 11

Grimes v. Vitalink Communications Corp., 17 F.3d

1553 (3d Cir.), cert. denied, 513 U.S. 986

CRUD. oka 485 oo b SERRE Ea eee 24

Gulfstream Aerospace Corp. v. Mayacamas Corp. , 485

UB. 278 CHR. «0 VANE Sal OU LA Oe. 17

Hanlon v. Metropolitan Life Insurance Co., No. 1:96

CV 1349 (N.D. Ohio July 22, 1996) ............. 19

Hansberry v. Lee, 311 U.S. 32 (1940) ......... 21, 22, 23, 24

Harrison v. Metropolitan Life Ins. Co., No. CV 95-B-

2044-NW (N.D. Ala. Dec. 5, 1995) ............. 19

Helstoski v. Meanor, 442 U.S. 500 (1979) ............. 17

Helton v. Metropolitan Life Insurance Co., No. 95-

0934-BH-S (S.D. Ala. Feb. 1, 1996) ............ 20

Horton v. Metropolitan Life Insurance Company, No.

93-1849-CIV-T-23A (M.D. Fla. Oct. 25, 1994),

aff'd sub nom. Grilli v. Metropolitan Life .

Insurance Co., 78 F.3d 1533 (11th Cir.),

clarified, 92 F.3d 1074 (11th Cir.), cert. denied

sub nom. Coulter v. Metropolitan Life Insurance

Co., 117 S. Ct. 608 (1996), reh'g denied, 117 S.

Ch, Dies cee es ee ees ck ORR: passim

Hunter v. Metropolitan Life Insurance Co., No. 95-

0935-BH-S (S.D. Ala. Feb. 1, 1996) ............ 20

Jones v. Metropolitan Life Insurance Co., No. 96-A-

754-S (M.D. Ala. Nov. 7, 1996) ............... 19

Keene Corp. v. United States, 508 U.S. 200 (1993) ....... 14

Ladnier v. Metropolitan Life Insurance Co., No. 95-

0300-B-C (S.D. Ala. Apr. 14, 1995)............. 20

Laskey v. International Union, UAW, 638 F.2d 954 (6th

Cae Ses FOOLS. Y Sea, SS a 24

Mann Manufacturing, Inc. v. Hortex, Inc., 439 F.2d

Pe es bo ee eek USS a. 19

Peters v. National Railroad Passenger Corp. , 966 F.2d

GS ie hk ke Gk acs bao x bas 0 19

Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985) .... 14, 21

In re Real Estate Title & Settlement Services Litigation,

869 F.2d 760 (3d Cir.), cert. denied, 493 U.S.

AEE oa b eka vawe ed au ue 15

In re Rhone-Poulenc Rorer, Inc., 51 F.3d 1293 (7th

k's wae's 27

xii

Singleton v. Metropolitan Life Insurance Co., No. 96-

0309-AH-C (S.D. Ala. June 21, 1996) ........... 19

Spears v. Johnson, 859 F.2d 853 (ilth Cir. 1988),

vacated in part on other grounds, 876 F.2d 1485

(iit ie BS i ee ES his ow... 18

Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22

SE 6 6 AD Sh OS Cae cea eee ss 14, 18

Sutton v. Metropolitan Life Insurance Co., No. 2:95-

CV-308 (E.D. Tenn. Nov. 17, 1995) ............ 20

Taylor v. Metropolitan Life Insurance Co., No. 95-

0933-58i-S (S.D. Ale. Feb. 1, I99G) .... 2.2.5... 19

Valentino v. Carter-Wallace Inc., 97 F.3d 1227 (9th

Che TSB iiihin 0 Sh eR PE RE eee oi cs 27

Van Dusen v. Barrack, 376 U.S. 612 (1964) ............ 16

West Gulf Maritime Association v. ILA Deep Sea Local

26, FSi PAG Tat Ge Ge Fee bw oe le cece 18

Willy v. Coastal Corp. , 503 U.S. 131 (1992) ............ 14

Constitutional Provisions, Statutes and Rules:

Due Process Clause, U.S. Const. Amend. V ........ 1, 13, 14

McCarran-Ferguson Act,

iS U.S; GB O0ts-0008 ois is 2 eek 1, 13, 16, 24, 25

Be Wise A hc i Oa es ce Ve 12, 18

a5 U.S.C. 6 GOS... id, i 2k. .a8 ae cS oe passim

EE a Ean. ead. a acs es at ces bo kad 2

ee ee. sentences cee wd ee 6

ee i eee eae 7

Ee ike On a eb ww ow 4 0 oes 3, 5, 24, 26, 27

Ne ew ee an 5

ee i 2, 13

IN THE

Supreme Court of the United States

OCTOBER TERM, 1996

No. 96-1975

RONALD COULTER, ET AL.,

Petitioners,

~ Y, ~

METROPOLITAN LIFE INSURANCE COMPANY,

Respondent.

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

BRIEF OF RESPONDENT

METROPOLITAN LIFE INSURANCE COMPANY

IN OPPOSITION TO THE PETITION

Respondent Metropolitan Life Insurance Company

(“MetLife”) respectfully submits this brief in opposition to the petition

for a writ of certiorari.

STATUTES AND OTHER PROVISIONS INVOLVED

The petition involves 28 U.S.C. § 1404(a). Petitioners also

purport to raise arguments under the Due Process Clause of the Fifth

Amendment to the United States Constitution and under the

McCarran-Ferguson Act, 15 U.S.C. §§ 1011-1015. The text of the

relevant provisions is reprinted in the appendix to this brief.

[Appendix (“App.”) la.]

STATEMENT OF THE CASE

This petition—which marks various petitioners’ and their

counsel’s second attempt to obtain a writ of certiorari on the same

issues—arises from several discretionary orders by the United States

District Court for the Western District of Pennsylvania transferring

petitioners’ four actions to the Middle District of Florida under-28

U.S.C. § 1404(a). The District Court in Florida previously had

entered judgment in a nationwide class action settlement and had

retained jurisdiction to enforce its judgment.

MetLife asked the Pennsylvania court to transfer petitioners’

cases to Florida because petitioners are (or seek to represent)

members of the settlement class and because the class action judgment

precludes many of the claims petitioners continue to assert. In

addition, petitioners’ counsel and several of the petitioners actually

had appeared and had litigated—and lost—their claims in the Florida

federal court and on appeal. Not surprisingly, the certiorari petition

nowhere cites the Eleventh Circuit decision rejecting all of petitioners’

counsel's arguments as “frivolous” and imposing sanctions under Fed.

R. App. P. 38. See Grilli v. Metropolitan Life Ins. Co., 78 F.3d

1533, 1539 (11th Cir.), clarified, 92 F.3d 1074 (11th Cir.), cert.

denied sub nom. Coulter v. Metropolitan Life Ins. Co. , 117 S. Ct. 608

(1996), reh’g denied, 117 S. Ct. 1121 (1997).

The District Court in Pennsylvania did not rule on the

substance of petitioners’ claims or MetLife’s defenses. The court

simply exercised its discretion to transfer the cases to the forum of the

related class action in the interests of justice and convenience.

Petitioners unsuccessfully sought mandamus from the Third Circuit

and—despite their failure to meet any of the criteria of Sup. Ct.

R. 10—have again petitioned this Court for certiorari.

A. Background of the Florida Class Action

On November 1, 1993, Horton v. Metropolitan Life Insurance

Company, No. 93-1849-CIV-T-23A, was filed in the United States

District Court for the Middle District of Florida. The plaintiffs

asserted federal and state-law claims on behalf of a putative

nationwide class of persons who had purchased MetLife whole life

insurance policies as “retirement plans” or “savings plans” based on

Sales solicitations that allegedly had not fully disclosed that. the

products being sold were life insurance policies.

1. The Horton Settlement Agreement

After several months of arm’s-length and at times

acrimonious negotiations, MetLife and the Horton plaintiffs reached

a proposed settlement. On April 22, 1994, the Horton court

preliminarily approved the proposal and conditionally certified a

nationwide opt-out settlement class under Fed. R. Civ. P. 23(b)(3),

consisting of:

all persons who purchased a MetLife whole life insurance

policy as a retirement and/or other savings plan-or vehicle,

based in whole or in part on written materials or other

solicitations that allegedly did not fully disclose that these

plans were life insurance products from (a) the Rick Urso &

Associates sales office (or its predecessor office) between

January 1, 1988 and October 31, 1993, or (b) any other

office of MetLife between January 1, 1990 and October 31,

1993. [Appendix to Petition for Certiorari (“Pet. App.”)

249a, 4 1.]

The proposed settlement offered eligible class members full

restitution of all net premiums they had paid to MetLife, plus interest

(or, for persons with in-force policies, the option of an annuity funded

in the amount of the cash refund). [App. 7a, ¢.5.] In addition,

MetLife agreed to pay the plaintiffs’ attorneys’ fees without

diminishing the class members’ recovery. The settlement resolves

only those claims arising from past insurance sales. It does not

purport to resolve claims arising from future conduct or to regulate

MetLife’s future conduct in any way.

Pursuant to the Settlement Agreement and the Horton court's

order, notice of the proposed settlement was mailed to some 71,000

potential settlement class members and was published in various

national and regional newspapers and magazines. [App. lla, ¢{ 15-

16.] The court’s order required all potential class members who did

not wish to participate in the settlement class to submit written

requests for exclusion by June 13, 1994. [Pet. App. 252a, 49.] The

court also set a date for a hearing on class certification and final

approval of the settlement, at which class members could appear and

object.

2. The Coulters’ Participation in the Settlement Hearing

Ronald and Anissa Coulter, who are among the petitioners,

appeared in the Horton action through their present attorneys (the

“Behrend firm”). They did not file a timely request to opt out of the

settlement class, but instead chose to object to the settlement and

appear at the settlement hearing. See Grilli, 78 F.3d at 1536-37.

The Coulters also filed an “intervention” motion asking the

Horton court (i) to “sever” all Pennsylvania residents from the Horton

settlement class so the Coulters could seek to represent them in a

separate putative class action, or, alternatively, (ii) to allow the

Coulters to “retain” their own counsel on behalf of the Pennsylvania

members of the Horton class. [Pet. App. 230a.] Although they have

never been certified as representatives of any class, the Coulters and

their counsel purported to speak on behalf of all Pennsylvania

members of the Horton settlement class, whom the Coulters sought to

represent as a putative “class” and “subclass” in the Coulter action in

Pennsylvania. See infra pp. 7-8.

On July 18, 1994, the Horton court held a full-day evidentiary

hearing on the proposed settlement, the Coulters’ “intervention”

motion, and various other matters. The Coulters, through the

Behrend firm, appeared and objected to the proposed settlement.

They also argued at length in support of their “intervention” motion.

See Grilli, 78 F.3d at 1536.

3. The Final Judgment and Injunction in Horton

On October 25, 1994, the Horton court entered an order

[App. 23a] and final judgment [id. 27a], supported by extensive

findings of fact and conclusions of law [id. 6a], approving the class

action settlement and dismissing all settlement class members’ claims

“on the merits and with prejudice” [id. 25a, 6; id. 28a, 42]. The

court rejected all of the objections raised by the Coulters and the

Behrend firm [id. 17a, { 39], including their argument that alleged

differences between the laws of Pennsylvania and other states made

class certification inappropriate [Pet. App. 132a-133a, 4 53]. The

Horton court also concluded that the settlement class met the

requirements of Fed. R. Civ. P. 23. [App. 15a-16a, 4 34; Pet. seth

128a-129a, { 47.]

The court therefore ruled that “[t}he Settlement Agreement

is and shall be binding on all settlement class members” [App. 24a,

{ 4], and it released MetLife and its employees from, among other

things, class members’ claims related to the sale of whole life

insurance policies as retirement or savings plans [id. 24a-25a, 4 5].

The court expressly retained continuing jurisdiction to enforce its

orders and administer the settlement. [/d. 25a-26a, | 7; id. 28a { 3.]

On November 8, 1995, pursuant to its retained jurisdiction, the court

permanently enjoined all Horton class members and their attorneys

and representatives (among others) from litigating Horton-related

claims in any other forum. [Pet. App. 117a, 4 6.]

4. Denial of the Behrend Firm’s Horton Motions

The Horton court not only rejected the Coulters’ and the

Behrend firm’s objections to the proposed settlement; it also denied

numerous motions filed by counsel and their various clients.

First, at the settlement hearing, the court orally denied the

Coulters’ “intervention” motion. The court later issued a written

order, accompanied by detailed findings of fact and conclusions of

law, on October 25, 1994. [Pet. App. 119a-134a.]

The court expressly found that “the Coulters are settlement

class members.” [Pet. App. 126a, ¢ 43.] They therefore had a

“legally protectable interest in the subject of [the Horton] action.”

[id.; see also Pet. App. 127a, ¢ 45 (“[a]s settlement class members,

the Coulters already had the right to opt out of the settlement class or

appear through counsel”).] But the court denied intervention because

it found that the Coulters were adequately represented by class

counsel and did not satisfy other prerequisites of Fed. R. Civ. P. 24.

[id. 126a-128a, {{ 43-44, 46 (“reject{ing] the Coulters’ argument that

[the Horton] plaintiffs cannot or will not adequately represent their

interests”). ]

After the oral denial of their “intervention” motion, the

Coulters and various other Behrend firm clients moved for leave to

opt out of the class belatedly. The court denied the motions,

concluding that the movants had failed to show “excusable neglect”

for their untimeliness, as required by Fed. R. Civ. P. 6(b)(2).

Devoting particular attention to the Coulters, the court ruled that,

[aJs class members, the Coulters [had] filed a notice of

intention to appear and objections to the proposed settle-

ment. ... Apparently, the Coulters made a tactical decision

to avoid exclusion for the purpose of objecting to the

settlement and seeking significant relief (i.e., exclusion of all

Pennsylvania residents or appointment of their attorney as

class counsel). However, they cannot have it both ways. The

Coulters had a choice to opt out or participate. They chose

to participate. [App. 36a (emphasis added). }

Various other persons represented by the Behrend firm —

including petitioners Shelley Daughenbaugh and Robert Hemcher —

filed yet another motion in the Horton court, this time seeking a

declaration that they were not Horton class members. [See id. 39a.]

Noting the total absence of specific evidentiary support for the motion,

the Horton court denied it without prejudice, and directed that “any

petitioner wishing to obtain a declaration of their status in relation to

this class action shall file [with a special master] on or before

November 17, 1994, an individual petition making the requisite

allegations supported by affidavits or other admissible evidence.” [/d.

40a.] The movants did not do so.

In addition, the Coulters and the Behrend firm moved for

“injunctive relief,” “remedial measures” and “sanctions,” alleging

that two MetLife sales representatives had improperly contacted

several Horton class members. The motion sought “permission to

conduct discovery, to require the issuance of a new class notice, to

appoint their attorney, Behrend, as co-counsel for the class, and to

award attorney’s fees.” Grilli, 78 F.3d at 1537. The Horton court

denied this motion for lack of evidentiary support. Concluding that

the motion “‘appears to have been filed for the sole purpose of

causing delay, derailing the proposed class action settlement, and

generating legal fees for the Coulters’ attorneys,’” the court sua

sponte admonished the Coulters and the Behrend firm to “‘remain

mindful of the provisions of [Federal Rule of Civil Procedure] 11.°”

Id. at 1537 n. 6 (quoting District Court).

5. The Behrend Firm’s Horton Appeals

The Behrend firm, on behalf of the Coulters and its other

clients (including petitioners Daughenbaugh and Hemcher), filed four

appeals from the Horton court's rulings. However, neither the

Behrend firm nor anyone else attempted to appeal the final judgment

approving the class action settlement.

The Eleventh Circuit affirmed the Horton court's rulings in

all respects, found all four of the Behrend firm’s appeals “frivolous,”

and awarded “double costs and reasonable attorneys’ fees” against the

appellants. Grilli, 78 F.3d at 1535, 1539. The Behrend firm

petitioned for rehearing, which was denied. Counsel then moved for

leave to file a second petition for rehearing, but the Eleventh Circuit

denied leave to file.

The Behrend firm and its clients next petitioned this Court for

a writ of certiorari, which was denied. 117 S. Ct. 608 (1996). They

then sought rehearing, which also was denied. 117 S. Ct. 1121

(1997).

B. Background of the Behrend Firm’s Pennsylvania Actions

The four actions at issue in the present petition were filed by

the Behrend firm in Pittsburgh, Pennsylvania. All four cases, like the

Horton action, allege that MetLife sold life insurance policies as

retirement or savings plans without fully disclosing that the products

being sold were life insurance policies.

1. Coulter v. MetLife

The Behrend firm filed the Coulter putative class action on

March 25, 1994, almost five months after the Horton case had com-

menced. The Complaint, as amended, purports to assert claims on

behalf of 15 named plaintiffs and a putative “class” consisting of “all

of the Pennsylvania residents who purchased from [MetLife], life

insurance policies or annuities which said [sic] policies or contracts

covering life insurance or annuities were not formally approved by the

Pennsylvania Insurance Commissioner.” [Pet. App. 144a, { 16.]

The Complaint also purports to plead claims on behalf of a putative

“subclass” consisting of:

all Pennsylvania residents who purchased from [MetLife] a

“50/50 Savings Plan,” a “State Street Wealth Accumulation

Plan,” an “Individual Retirement Benefit Plan,” a “Nurse's

Insured Retirement Plan,” a “Nurse’s Guaranteed Retirement

Plan,” a “Tax Advantaged Bonus Plan,” an “Enricher

Insured Savings Plan,” and/or any retirement and/or savings

plan, which each [sic] was purported to have life insurance

“components,” but which in reality were [sic] nothing more

than life insurance policies. [/d. 156a, { 35.]

As to this putative “subclass,” the Complaint alleges that

MetLife “intentionally sold policies of life insurance as a retirement

and/or savings plan for the insured, with a life insurance component,

to consumers that were interested in purchasing a savings plan and/or

a retirement plan, not life insurance. The customers did not get what

they had bargained for.” [/d. 158a-159a, ¢ 43.] The Complaint

pleads that “MetLife was offering one product (the

retirement/investment plans set forth in the paragraph above), and

selling another (a life insurance policy).” [/d. 156a, { 36.]

2. Rostek v. MetLife

The Behrend firm filed the Rostek putative class action on

June 30, 1994. The Complaint, as apparently modified by a later

motion for class certification, purports to assert claims on behalf of

eight named plaintiffs and a purported class of:

All Pennsylvania residents who have purchased “college

savings plans,” which in reality were only large MetLife life

insurance policies on children under eighteen years of age, in

an amount in excess of $10,000.00. [Rostek Record (“R.”)

20, 4 1.]

The Rostek Complaint charges that MetLife “intentionally

sold life insurance policies as a college savings plan to consumers that

were interested in purchasing a college savings plan for their child,

not life insurance. The customers did not get what they had bargained

for.” [R.1, 44.] The complaint further alleges that “MetLife was

offering one product (a College Savings Plan for the child and/or

children) and selling another (a life insurance policy on the child

and/or children)” [id. ¢ 3], and that MetLife “defraud{ed] customers

by using sales tactics that failed to identify life insurance as the

product of sale” [id. { 6].'

3. Corriere v. MetLife

The Behrend firm filed the Corriere case on May 8, 1995,

long after the Horton court had entered its final judgment on October

25, 1994. The Corrieres, who did not opt out of the Horton

settlement class, assert claims relating to their purchase of two whole

life insurance policies issued during the class period.

The Complaint begins with allegations that MetLife

developed a marketing technique under which its agents are

trained and directed by MetLife to sell life insurance through

a series of “scripted” misrepresentations, which led

unsuspecting consumers to believe the policies they are

purchasing are adequate vehicles to serve as retirement or

investment plans. [R.6, Ex. E, 424 (emphasis added). }

The Complaint then alleges the Corrieres were the purported

victims of this conduct: it asserts a MetLife sales representative

“represented that these policies could provide the Plaintiffs with

significant savings which could be used in the future for their

retirement” [id. {31 (emphasis added)]. The Complaint also accuses

MetLife of “engag[ing] in a pattern of misrepresenting the nature

1. The named plaintiffs in Rostek are not Horton class members: one of

them timely excluded himself from the settlement class, and the others do not

come within the class definition. Many of the putative class members, however,

appear to be Horton settlement class members, and the Rostek named plaintiffs

purport to assert claims on their behalf.

[ajnd terms of the products that they were selling to the Plaintiffs,

with the intent of inducing the Plaintiffs to purchase something other

than what it was represented to be” {id. ¢ 71 (emphasis added)}.

4. Smith v. MetLife

The Behrend firm filed the Smith action on behalf of Douglas

Smith in October 1995, and later commenced a separate action on his

behalf against another defendant (a MetLife sales representative) in

January 1996. The Behrend firm then moved to consolidate the two

cases and explained that

[b}joth actions arise out of a series of solicitations in which the

Defendant agents, Jeffrey J. Rodgers and Robert Martini,

together, on behalf of their principal, [MetLife], fraudulently

induced the Plaintiff to purchase a life insurance policy

through misrepresentations that this policy was a “retirement

plan.” [R.5S, Ex. E, { 1 (emphasis added).]

The life insurance policy Smith had purchased was a whole

life insurance policy issued during the Horton class period. Smith did

not opt out of the Horton settlement class.

C. The Transfer Motions

MetLife moved to transfer the Coulter, Rostek, Smith and

Corriere cases to the Horton court under 28 U.S.C. § 1404(a). The

motion stressed (i) the significant overlap between the Coulter putative

“subclass,” the Rostek putative class and the Horton settlement class,

(ii) the Behrend firm's and various plaintiffs’ extensive, voluntary

participation in Horton, (iii) the Horton court's rulings that the

Coulters and other plaintiffs were Horton class members, and (iv) the

Corrieres’ and Smith's apparent membership in the Horton class.

Emphasizing the Horton court's retention of continuing jurisdiction,

its permanent injunction order, and its appointment of a special master

to resolve disputes about class membership, MetLife urged that the

Horton court was the more appropriate and convenient forum to

decide whether and to what extent the Coulter, Rostek, Corriere and

Smith plaintiffs and putative class members were subject to the orders

and judgment in Horton.

The District Court agreed. Without deciding whether

petitioners were or were not Horton class members, and without

ruling on any other substantive issues, the court exercised its

discretion to transfer the four cases to the Middle District of Florida

so the Horton court could decide questions about Horton class

membership and the scope of the Horton judgment. The District

Court concluded:

This court ought not to sit in judgment of the actual

decisions reached by its sister court in Florida with respect to

the Coulter plaintiffs. Nor should this court accept plaintiffs’

invitation to ignore the fact that the Florida court has retained

jurisdiction to interpret the orders it entered in all cases which

may involve Horton class members. Rule 1404(a) is

addressed to concerns of judicial economy. This concern is

implicated where, as here, resolution of the issues raised by

plaintiffs in both the Coulter and Rostek actions necessarily

involve[s] review of the scope of the proceedings undertaken

in the Middle District of Florida, and the propriety of that

court’s orders. The most convenient, and appropriate, forum

of litigating those issues is the United States District Court for

the Middle District of Florida.

[Pet. App. 63a-64a (magistrate judge’s report); id. 45a-46a (order

adopting report as court’s opinion). }

The District Court's ruling in Smith also cited the Horton

court’s appointment of a special master to decide issues relating to

class membership—a process the Eleventh Circuit previously had

approved on appeal, see Grilli, 78 F.3d at 1538-39. As the District

Court observed:

2. Accord Pet. App. 84a (magistrate judge's report in Corriere) (“the initial

determination of whether the plaintiffs here are members of the Horton class, and

whether they are bound by the orders entered in Horton, should be made by that

court”); id. 74a (magistrate judge's report in Smith) (cases were transferred to

Horton court “so that it can exercise the very jurisdiction which it has retained to

determine. in the first instance, whether plaintiff is, in fact, barred by the Horton

settlement”); id. 40a, 51a (orders adopting reports as court's opinions).

A process has been established in th{e] [Horton] court [for

determining class membership], and this court should not

permit plaintiff and others to challenge the Horton settlement

piecemeal in courts all over the nation. [Pet. App. 74a.]

The Coulter, Rostek and Correre plaintiffs then asked the

District Court to certify its transfer orders for interlocutory appeal

under 28 U.S.C. § 1292(b).? The court denied the requests [App. 3a-

5a], because the transfer orders did not involve any “controlling

question of law,” as § 1292(b) requires.

The court expressly rejected the contention that it had ruled

against petitioners on any of the legal questions they had raised. For

example, the court held it had “authority” to decide whether

petitioners could make “collateral attacks on class action settlements

in the forum of the Plaintiffs’ choice,” but concluded that

this does not prevent a transfer pursuant to 28 U.S.C.

§ 1404(a), and my decision to transfer is not a ruling as a

matter of law that no such authority exists. A ruling pursuant

to § 1404(a) is a matter addressed to the discretion of the

court. Thus, the decision in this case was discretionary, and

not a question of controlling law. [App. 4a.]

Similarly, the District Court concluded that it had authority

to rule on the Horton judgment's preclusive effect but that it

nevertheless had exercised its discretion to allow the Horton court to

make that determination:

I determined that a discretionary transfer was warranted

pursuant to 28 U.S.C. § 1404(a), and that, although I could

address the questions presented, it would be more appropriate

for the Florida court to do so. [/d.]

D. The Mandamus Petitions

The Behrend firm filed three mandamus petitions in the

United States Court of Appeals for the Third Circuit (one for Coulter

3. Smith also sought § 1292(d) certification but then filed a mandamus

petition before the District Court ruled on the request.

and Rostek, one for Corriere, and one for Smith) asking the court to

order the District Court to vacate its transfer orders. The Court of

Appeals denied all three petitions without comment.

Petitioners then filed a “Petition for Rehearing En Banc.”

The Court of Appeals, treating the petition as both a petition for panel

rehearing and a suggestion for rehearing en banc, denied it. The

Behrend firm's latest certiorari petition followed.

REASONS FOR DENYING THE WRIT

Petitioners’ contentions that the Due Process Clause and the

McCarran-Ferguson Act somehow bar the transfer of these cases to

the Horton court are devoid of merit. The District Court's transfer

orders were routine exercises of discretion that raise no substantial

legal issues and impair no substantive rights. Neither the

discretionary transfer orders nor the Third Circuit’s discretionary

denials of mandamus present any “important question of federal law

that has not been, but should be, settled by this Court,” Sup. Ct. R.

10(c), and there is no reason to grant certiorari.

Petitioners’ attempted “collateral attack” on Horton is nothing

more than an abusive attempt to relitigate matters they and their

counsel already litigated and lost. But regardless of whether a

“collateral attack” is or is not available, arguments about the

correctness of the Horton judgment are irrelevant to the rulings

below. The transfer orders did not decide any substantive issues, so

petitioners may raise in the Middle District of Florida any claims they

could have raised in the Pennsylvania court. And petitioners’

arguments lack merit in any event.

THE DISTRICT COURT’S DISCRETIONARY TRANSFER

ORDERS PRESENT NO IMPORTANT QUESTION OF LAW

WARRANTING THIS COURT’S REVIEW.

A. The Due Process Clause Does Not Guarantee Petitioners an

Unrestricted Choice of Venue for a “Collateral Attack.”

Petitioners’ primary argument is that they allegedly have a

“constitutional right” to “collaterally attack” the Horton court's orders

and judgment in any forum of their choice, and that this alleged right

somehow overrides the District Court's authority to transfer a case

under 28 U.S.C. § 1404(a) to promote the interests of justice,

convenience, judicial economy, and respect for the rulings of a court

of coordinate jurisdiction. Petitioners are wrong.

Petitioners’ asserted due-process right to challenge the

adequacy of representation in Horton is not at issue here. The only

question is whether petitioners have a constitutional right to insist that

a particular federal court hear that challenge, even when the court in

which the challenge has been raised believes, in its discretion, that

another court is the more appropriate forum to decide the issue.

It is beyond question that Congress has broad power to

establish lower federal courts, allocate jurisdiction among them, and

enact laws regulating the conduct of litigation in those courts. See,

e.g., Keene Corp. v. United States, 508 U.S. 200, 207 (1993); Willy

v. Coastal Corp., 503 U.S. 131, 136 (1992). One of those laws is

§ 1404(a), which empowers district courts to transfer cases to other

districts when “the interest of justice” would be served by doing so.

Stewart Org., Inc. v. Ricoh Corp. , 487 U.S. 22, 31-32 (1988).

In light of § 1404(a), petitioners cannot claim any

constitutional right to require a particular federal court to hear a

dispute even when the court believes § 1404(a)’s considerations point

to another court. Due process requires only an “opportunity to be

heard,” e.g., Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 812

(1985)—not an opportunity to forum-shop.

Indeed, if petitioners’ argument were correct, no federal

court ever could transfer a case under § 1404(a) if a plaintiff objected.

Every plaintiff could insist he or she had a “constitutional right” to be

heard in his or her chosen forum, regardless of whether the same

issues could be litigated elsewhere, and regardless of whether the

interests of justice favored a transfer. This view of the Due Process

Clause obviously is not the law.

Nor have petitioners offered any reason why “collateral

attacks” on class-action judgments should be uniquely exempted from

the change-of-venue statute applicable to all other cases. As the

Second Circuit held in In re “Agent Orange” Product Liability

Litigation, 996 F.2d 1425 (2d Cir. 1993), cert. denied, 510 U.S. 1140

(1994):

[Nothing in the Constitution or in our jurisprudence demands

that class members have an unchallengeable choice of forums

in which to launch [an attack on a class-action judgment].

While the law as a general rule permits a plaintiff to choose

his forum, that freedom is not absolute, as the removal,

venue and multidistrict litigation statutes and the personal

jurisdiction and forum non conveniens doctrines all

demonstrate.

996 F.2d at 1432 (affirming injunction against class members’

attempts to collaterally attack federal class-action settlement in Texas

state courts).*

4. Petitioners’ contention that their “collateral attack” exempts them from the

ordinary rules governing transfer of venue rests almost entirely on their

misreading of a single Third Circuit case, In re Real Estate Title & Settlement

Services Litigation, 869 F.2d 760 (3d Cir.), cert. denied, 493 U.S. 821 (1989),

which held that a District Court should not enjoin members of a non-opt-out class

from collaterally attacking a federal class-action settlement in state court if those

persons lacked minimum contacts with the class-action forum. That decision,

however, has nothing to do with an order transferring cases filed by persons who

(i) are members of a certified opt-out class, (ii) did not exercise their right to

exclude themselves from the class, (iii) appeared and objected through counsel in

the court that had certified the class action, and (iv) actually litigated and lost their

arguments at each level.

ove

’

The District Court's transfer orders did not decide whether

petitioners are class members. Nor did the orders determine the

preclusive effect of the Horton judgmem. Nor did the court make any

other substantive rulings on petitioners’ claims. Because petitioners

remain free to raise whatever arguments they wish in the Middle

District of Florida (subject, of course, to the same preclusion

principles that would have applied in Pennsylvania), the transfer

orders do not impair their alleged right to litigate the merits of their

“collateral attack.” Petitioners’ due-process argument thus is without

merit.

B. The McCarran-Ferguson Act Did Not Require the District

Court to Deny the Transfer Motions.

Petitioners also contend [at 28-29] that the McCarran-

Ferguson Act, 15 U.S.C. §§ 1011-1015, requires the application of

Pennsylvania law to their claims and therefore precluded the transfers.

Like the due-process argument, this contention is irrelevant to the

transfer orders.

As the very cases cited by petitioners demonstrate, the

transfer of-these actions does not change the applicable substantive

law. E.g., Ferens v. John Deere Co., 494 U.S. 516 (1990) (after

§ 1404(a) transfer, transferee forum must apply transferor forum's

choice-of-law rules); Van Dusen v. Barrack, 376 U.S. 612 (1964)

(same). Any issues governed by Pennsylvania law in the transferor

forum will continue to be governed by Pennsylvania law in the

transferee forum.

Thus, even if petitioners were correct that the McCarran-

Ferguson Act entitled them to have Pennsylvania law applied to their

Claims (but see infra pp. 25-26), the transfer would not in any way

impair that alleged right. The McCarran-Ferguson Act nowhere

suggests that, where Pennsylvania law applies, it must be applied i in

Pennsylvania by a Pennsylvania court.

THE COURT OF APPEALS ACTED WITHIN ITS

DISCRETION IN DENYING MANDAMUS TO REVIEW THE

DISCRETIONARY TRANSFER ORDERS.

Not only do the discretionary transfer orders fail to present

any substantial question worthy of review; the Third Circuit's refusal

to gramt extraordinary mandamus relief was itself an exercise of

discretion that does not call for a grant of certiorari.

Mandamus is an extraordinary remedy available only in

circumstances “amounting to a judicial usurpation of power.”

Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 289

(1988) (quotation marks omitted). The party seeking mandamus must

show that there is no adequate alternative means of relief and that the

“right to issuance of the writ is ‘clear and indisputable."” Helstoski

v. Meanor, 442 U.S. 500, 505 (1979). Moreover, even when the

prerequisites for mandamus are satisfied, “issuance of the writ is in

large part a matter of discretion with the court to which the petition is

addressed” —here, the Court of Appeals. Jd.

Petitioners certainly do not have any “clear and indisputable”

right to an exemption from § 1404(a) merely because they seek to

“collaterally attack” a class-action judgment. Moreover, because the

transfer orders did not decide petitioners’ substantive claims,

petitioners have an adequate remedy in the Middle District of Florida

and, if appropriate, in the Eleventh Circuit. The Third Circuit's

denial of mandamus thus was clearly within that court's discretion and

presents no important legal issues for this Court's consideration.

In addition, mandamus would not have been appropriate to

overturn the District Court's fact-specific, discretionary transfer

determinations. See, e.g., Allied Chem. Corp. v. Daifion, Inc. , 449

U.S. 33, 36 (1980) (“Where a matter is committed to [the trial

court's} discretion, it cannot be said that a litigant’s right to a

particular result is ‘clear and indisputable”). This Court has held that

§ 1404(a) invests the District Courts with broad discretion to

“adjudicate motions for transfer according to an individualized,

case-by-case consideration of convenience and fairness” and “to

weigh in the balance a number of case-specific factors.” Stewart

Org. , 487 U.S. at 29 (quotation marks omitted). The District Court

here merely exercised that discretion based on its analysis of the

unique facts of these particular cases.

Contrary to petitioners’ repeated assertions, the District Court

‘did not grant the motions because it felt it lacked the power to

adjudicate petitioners’ claims. Rather, the court transferred the cases

because it believed, in its discretion, that transfers were appropriate

in light of § 1404(a)’s considerations and the Horton court's rulings.

As the court explained in declining to certify its orders for

interlocutory appeal under 28 U.S.C. § 1292(b):

Plaintiffs assert that they are entitled to collaterally attack a

class action settlement, such as the Horton settlement, in the

forum of their choice, and that this is the controlling question

of law involved in this case. . . . Plaintiffs argue that I

ignored precedent which permits such collateral attacks on

class action settlements to be made in the forum of the

Plaintiffs’ choice. Indeed, / have the authority to reach such

questions. ... In my view, however, this does not prevent

a transfer pursuant to 28 U.S.C. § 1404(a), and my decision

to transfer is not a ruling as a matter of law that no such

authority exists. A ruling pursuant to § 1404(a) is a matter

addressed to the discretion of the court. Thus, the decision

in this case was discretionary, and not a question of

controlling law. [App. 4a (emphasis added; citation

omitted). ]}

Petitioners’ contention [at 15] that the District Court “found it could

not entertain a collateral attack on the class action rulings of a non-

Pennsylvania court” thus misstates the court's orders.

The District Court clearly did not abuse its discretion in so

ruling. Courts throughout the country repeatedly have held that trans-

ferring later-filed cases such as these to another District Court is

appropriate where, as here, the other court is exercising continuing

jurisdiction over the subject matter of the later-filed actions.5 Indeed,

eight other federal district judges have transferred to the Horton court

ten other cases filed by litigants who appeared to be Horton settlement

Class members. As one of those courts explained,

[t]he Horton Court is more familiar with the issues

surrounding the certification of the Horton class. The Horton

court additionally retained jurisdiction over subsequent

actions impacting upon the Horton settlement. It is therefore

in the interest of judicial economy that this case be

transferred to Florida. . . .

Taylor v. Metropolitan Life Ins. Co., No. 95-0933-BH-S (S.D. Ala.

Feb. 1, 1996).° j

5. E.g., In re “Agent Orange” Prod. Liab. Litig., 996 F.2d at 1431

(affirming removal and transfer of cases to federal court that had settled prior class

action, so that court could determine plaintiffs’ membership in settlement class);

Carver v. Knox County, 887 F.2d 1287, 1289-93 (6th Cir. 1989) (transferring

class members’ claims to court hearing previously filed class action), cert. denied.

495 U.S. 919 (1990); Spears v. Johnson, 859 F.2d 853, 855 (11th Cir. 1988)

(transferring class member's case to another court with continuing jurisdiction

over class action), vacated in part on other grounds, 876 F.2d 1485 (11th Cir.

1989), West Gulf Maritime Ass'n v. ILA Deep Sea Local 24, 751 F.2d 721, 728-29

(Sth Cir. 1985) (holding that District Court should have dismissed or stayed action

or transferred it to court hearing pending action involving closely related issues);

Gregory-Portland Indep. School Dist. v. Texas Educ. Agency, 576 F.2d 81, 82

(Sth Cir. 1978) (court should have transferred action to other District Court

because case involved latter court's orders and continuing jurisdiction), cert.

denied, 440 U.S. 946 (1979); Mann Mfg., Inc. v. Hortex, Inc., 439 F.2d 403, 407-

08 (Sth Cir. 1971) (where one District Court has been adjudicating issues and has

enjoined litigation of related matter in second court, second court must either

transfer related suit to first court or dismiss case); see also Peters v. National R.R.

Passenger Corp., 966 F.2d 1483, 1487-88 (D.C. Cir. 1992) (court in which

settlement class member had collaterally attacked judgment “properly declined to

consider (plaintiff's) argument” but “might have entertained a timely motion to

transfer” to class action forum).

6. Accord Dailey v. Metropolitan Life Ins. Co., No. 1:97-0008-RV-S (S.D.

Ala. June 13, 1997); Jones v. Metropolitan Life Ins. Co., No. 96-A-754-S (M.D.

Ala. Nov. 7, 1996); Hanion v. Metropolitan Life Ins. Co., No. 1:96 CV 1349

(N.D. Ohio July 22, 1996): Singleton v. Metropolitan Life Ins. Co., No. 96-0309-

(continued...)

There is also no basis for petitioners’ contention [at 10] that

the transfer orders will require any trial on the merits to be held in

Florida. If the Horton court determines that any of petitioners’ claims

are not precluded by the Horton judgment and that the parties’

convenience and the interests of justice favor trying those claims in

Pennsylvania, the court will have the discretion to transfer the cases

back to the Western District of Pennsylvania.

For all these reasons, the District Court’s discretionary use of

§ 1404(a) to promote judicial efficiency and comity among the federal

courts was entirely appropriate. And the Third Circuit certainly did

not abuse its discretion in refusing to issue extraordinary writs of

mandamus to vacate the discretionary transfer orders.

Il.

PETITIONERS’ ATTACK ON THE HORTON JUDGMENT IS

IMPROPER, IRRELEVANT AND MERITLESS.

A. The Horton Judgment Is Not Properly Before This Court.

Petitioners devote much of their petition [at 15-20, 25-29] to

contesting the Horton court's judgment and arguing they should not be

bound by it. Those issues, however, are not properly before this

Court.

The District Court did not rule on the merits of petitioners’

attack on Horton. The court simply concluded that the Florida court

was in a better position to decide those issues.’ The Court of Appeals

6. (...continued)

AH-C (S.D. Ala. June 21, 1996); Helton v. Metropolitan Life Ins. Co., No. 95-

0934-BH-S (S.D. Ala. Feb. 1, 1996); Hunter v. Metropolitan Life Ins. Co., No.

95-0935-BH-S (S.D. Ala. Feb. 1, 1996); Harrison v. Metropolitan Life Ins. Co..,

No. CV 95-B-2044-NW (N.D. Ala. Dec. 5, 1995); Sutton v. Metropolitan Life Ins.

Co., No. 2:95-CV-308 (E.D. Tenn. Nov. 17, 1995); Ladnier v. Metropolitan Life

Ins. Co., No. 95-0300-B-C (S.D. Ala. Apr. 14, 1995).

7. See Pet. App. 83a (“I do not believe . . . that the merits of these

arguments should be reached by this court. Rather, the initial question is which

court ought to address the merits of these arguments”); id. 74a (“The remaining

(continued...)

also did not reach the merits; it merely exercised its discretion to deny

mandamus to overturn the transfer orders.

Petitioners’ purported right to “collaterally attack” the

Horton judgment thus has not yet been decided. If petitioners and the

Behrend firm continue to litigate their claims and lose, they can appeal

any final judgment to the Eleventh Circuit and then petition this Court

for certiorari. Until then, they have no jurisdictional basis to raise the

issue in this Court.

B. Res Judicata Precludes Petitioners’ Attack on the

Horton Judgment.

In any event, however, there is no merit to petitioners’ claim

of a broad right of “collateral attack” that allows them to reopen all

the class certification issues they and their attorneys litigated and lost

in the Horton case. Thus, a grant of certiorari would be inappropriate

even if those issues had been decided below.

It is beyond dispute that a class-act‘on judgment is binding on

all class members and precludes relitigation if those persons were

adequately represented. See, e.g., Shutts, 472 U.S. at 808 (“The

absent [class members] would be bound by the decree so long as the

named parties adequately represented the absent class and the

prosecution of the litigation was within the common interest”):

Hansberry v. Lee, 311 U.S. 32, 42 (1940) (“there has been a failure

of due process only in those cases where it cannot be said that the

procedure adopted, fairly insures the protection of the interests of

absent parties who are to be bound by it”). As Hansberry declared,

members of a class not present as parties to the litigation may

be bound by the judgment where they are in fact adequately

represented by parties who are present, or where they

actually participate in the conduct of the litigation in which

7. (...continued)

arguments raised by plaintiff need not be addressed on their merits. The real

question is whether this court or the Florida court should address them”); id. 64a

(“The most convenient, and appropriate, forum of litigating those issues is the . . .

Middle District of Florida”).

members of the -class are present as parties, or where the

interest of the members of the class, some of whom are

present as parties, is joint, or where for any other reason the

relationship between the parties present and those who are

absent is such as legally to entitle the former to stand in

judgment for the latter.

Id. at 42-43 (emphasis added; citations omitted).

Here, petitioners’ attorneys “actually participate[d] in the

conduct” of the Horton action on behalf of numerous clients, including

the Coulters, Daughenbaugh and Hemcher. /d. at 43. Petitioners

Cannot now invoke “adequacy of representation” as a way to avoid the

Horton judgment.

Moreover, Horton class members such as petitioners were

adequately represented in the class action even without the Behrend

firm's participation. The Horton court expressly

reject{ed} the Coulters’ argument that [the Horton] plaintiffs

Cannot or will not adequately represent their interests. The

Coulters’ interests are the same as those of the settlement

Class: they all claim to have been misled by the same types

of sales solicitations used to sell whole life insurance as

retirement and/or savings plans or vehicles. [Pet. App. 128a,

4 46.)

Petitioners’ assertion [at 18] that “[t]he Tampa Court made no

pretense that the interests of the Pennsylvania petitioners were being

adequately represented” thus misrepresents the record.

Not only were petitioners actually and adequately represented

in Horton; they also had ample opportunity to opt out of the class if

they were dissatisfied with either their representation or the proposed

settlement. As the Horton court observed:

This Court's April 22, 1994 Order . . . allowed the

Coulters—and any other dissatisfied Pennsylvania residents

within the settlement class—to opt out of the settlement class

and litigate elsewhere if they chose to do so... . In the

alternative, the Court’s order gave the Coulters the

Opportunity to remain in this class action and object to the

settlement, and to appear at the fairness hearing themselves

or through their own attorney... . As settlement class

members, the Coulters already had the right to opt out of the

settlement class or appear through counsel. Thus, denial of

the intervention motion would in no way prevent them from

protecting their rights.

(Pet. App. 126a-127a, 44 43-45.]

Instead of opting out, however, the Behrend firm and its

clients fully used (indeed, abused) their Opportunity to participate.

They filed objections to the settlement, challenging—among other

things—adequacy of representation [see, e.g., Pet. App. 230a, ¥ 25],

and they appeared and argued at the settlement hearing [id. 127a,

{ 44; App. 12a, ¢ 21]. The Horton court fully considered and

rejected these objections on the merits, including the “adequacy of

representation” issue. [App. 17a, { 39; Pet. App. 128a, {4 46-47. ]

The Behrend firm and its clients then prosecuted four

unsuccessful—indeed, “frivolous”—appeals to the Eleventh Circuit,

and then unsuccessfully sought certiorari. In light of this record,

petitioners’ assertion [at 19] that they were not “allowed” to

“challenge the adequacy of their representation” is preposterous.

In addition to having already litigated and lost the adequacy-

of-representation issue, the Behrend firm and its clients also litigated

and lost the other arguments they now seek to relitigate, such as their

arguments about Pennsylvania law. Petitioners and their counsel

specifically contended in Horton that “{t}he Coulter Class and sub-

Class members . . . are entitled to the application of Pennsylvania law

to their causes of action” [Pet. App. 224a, 4 10]. The Horton court

“considered and rejected” these arguments [App. 17a, 4 39], holding

that the contention about Pennsylvania law was “unfounded” in the

context of a settlement, because a court does not decide claims in

reviewing a settlement [Pet. App. 132a, 453]. See infra pp. 25-26.

Petitioners’ counsel also argued in Horton that the proposed

Class did not meet the requirements of Fed. R. Civ. P. 23. [E.g., Pet.

App. 227a-230a, {{ 22-25.] The Horton court considered and

rejected this argument as well, concluding that the settlement class

met all of Rule 23°s requirements [App. 15a, ¢ 34; Pet. App. 128a-

129a, ¢ 47] and that the Coulters were settlement class members [Pet.

App. 126a-127a, 44 43, 45].

Petitioners thus cannot pretend to be strangers to the Horton

litigation. Their own attorneys—and some of the petitioners

they lost at every level. Having had a full and fair opportunity to be

heard in the Horton court and on appeal, petitioners now are bound by

the Horton judgmem. See, e.g., Grimes v. Vitalink Communications

Corp., 17 F.3d 1553, 1558-61 (3d Cir.) (class members who had

chance to object to adequacy of representation at settlement hearing

were precluded from relitigating issue), cert. denied, 513 U.S. 986

(1994); Laskey v. International Union, UAW, 638 F.2d 954, 957 (6th

Cir. 1981) (similar); see also Hansberry, 311 U.S. at 43 (due process

does not prevent class judgment from being binding on class members

as long as “the procedure [was] so devised and applied as to insure

that those present are of the same class as those absent and that the

litigation is so conducted as to insure the full and fair consideration of

the common issue”).

Petitioners’ mere disagreement with the Horton court's and

the Eleventh Circuit’s rulings does not permit them to ignore the

fundamental “rule . . . of public policy and private peace” “that there

be an end of litigation [and] that those who have contested an issue

shall be bound by the result of the contest.” Federated Dep't Stores

v. Moitie, 452 U.S. 394, 401 (1981) (quotation marks omitted).

Having litigated and lost at every juncture in the Horton case,

petitioners and their attorneys do not have any constitutional right to

start all over again in another judicial Circuit.

C. The McCarran-Ferguson Act Did Not Bar the Horton

Settlement.

Not only are petitioners’ and their attorneys’ criticisms of the

Horton settlement precluded; they also are groundless. Petitioners’

principal argument [at 28] appears to be that the McCarran-Ferguson

Act—which declares that “[tJ}he business of insurance . . . shall be

Subject to the laws of the several States which relate to the regulation

. . . Of such business,” 15 U.S.C. § 1012(a)—should have prevented

certification of the Horton class. This contention misconstrues the

effect of the Horton settlement.

The Horton settlement does not intrude on the states’ role in

regulating the business of insurance. It simply provides for the com-

promise and settlement of certain existing claims in exchange for the

refund of net premiums plus interest or the issuance of new annuity

contracts. [See App. 7a-8a, {4 5-6.] The settlement does not

prescribe any standards for insurance transactions and does not

regulate the sale of insurance policies. Nor does it involve any

continuing relief applicable to future insurance sales. It affects only

members before October 31, 1993. [/d. 8a, { 8(a).}

Moreover, nothing in the Horton settlement purports to

exempt MetLife from state insurance laws or to impair state

regulators’ ability to enforce them. In fact, the insurance regulators

from virtually every state in the country approved the terms of the

settlement [App. 21a, { 51}, and counsel for the Florida Department

of Insurance appeared at the settlement hearing to testify in favor of

it [Plaintiffs’ Mandamus Ex. 5 at 7-8, 26-27, 44-45, 101-04, 195-98].

Petitioners’ argument [at 28-29] that the settlement somehow

“violated” the “national policy that the insurance industry is subject

to State laws and regulations” thus is specious. :

Contrary to petitioners’ assertion [at 28], the Horton court did

not “issue(] a uniform nationwide injunction affecting the marketing

of insurance policies.” The injunction to which petitioners refer

merely enjoins class members from litigating civ'' actions barred by

the Horton judgment in any forum other than the Middle District of

mn +

Florida. [Pet. App. 117a, ¢6.] It says nothing whatsoever about the

marketing of insurance. [See id. 113a-118a.]

Petitioners’ contention [at 22] that the Horton court erred by

not “applying” Pennsylvania insurance law to their claims is equally

meritless. The Horton case was settled. It was not litigated to

judgment on the merits. The court thus had no occasion to “apply”

Pennsylvania law—or any other particular law—to the merits of

plaintiffs’ claims. [See Pet. App. 132a, ¢ 53.}*

However, if petitioners mean the Horton court did not

consider the merits of their Pennsylvania-law arguments in

determining the propriety of class certification and the fairness of the

settlement, that contention is untenable. As discussed above, the

Behrend firm and the other parties extensively briefed the substantive

issues in the case, and the Horton court fully considered them. [See,

e.g., App. 13a-15a, 20a, 4 26, 32, 44 (discussing how merits of

plaintiffs’ claims bear on fairness of settlement).] The court rejected

all of the Behrend firm's arguments [App. 17a, ¢ 39], including the

the laws of other states required excluding Pennsylvania residents

from the settlement class [e.g., Pet. App. 225a-226a, 230a, ¢{ 13-15,

25}.

8. See also, e.g., Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1291 (9th

Cir.) (“The court need not reach any ultimate conclusions on the contested issues

of fact and law which underlie the merits of the dispute. for it is the very

uncertainty of outcome in litigation and avoidance of wasteful and expensive

litigation that induce consensual settlements”) (quotation marks omitted), cert.

denied , S06 U.S. 953 (1992), Cotton v. Hinton, $59 F.2d 1326, 1330 (Sth Cir.

1977) (“in evabuating the terms of the compromise in relation to the likely benefits

of a successful trial, the trial judge ought not [to] try the case in the settlement

hearings™).

9. For this reason, the cases petitioners cite [at 16-17] are inapposite. Those

cases do not say that amy differences in state law will preclude class certification:

they hold only that the trial court should consider those differences in determining.

under Rule 23(6)3), whether common questions predominate and whether a class

action is superior to other methods of adjudication. See Castano v. American

Tobacco Co., 84 F 3d 734, 740 (Sth Cir. 1996) (reversing class certification where

(continued...)

PNA RIES FeRAM UNI

Contrary to petitioners’ assertion, there is no inconsistency

between the Horton settlement relief and the remedies petitioners say

would have been available under Pennsylvania law. The purported

Pennsylvania-law remedies—punitive or treble damages—also were

potentially available for the same conduct under the RICO, statutory

Or common-law theories pleaded in Horton. Petitioners therefore

cannot demonstrate any conflict of interest between the Pennsylvania

class members and the rest of the class. The settlement for full

restitution plus interest was equally fair and adequate under the laws

of every state, as the Horton court found.

D. Petitioners’ Other Attacks on the Horton Settlement Are Also

Baseless.

Petitioners’ reliance [at 17] on the Third Circuit's decision in

Georgine v. Amchem Products, 83 F.3d 610 (3d Cir. 1996), aff'd sub

nom. Amchem Prods. v. Windsor, No. 96-270, 1997 U.S. LEXIS

4032 (June 25, 1997), is equally unavailing. As this Court confirmed

in Windsor, the Horton court was not required to ignore the proposed

settlement in considering whether to certify the class under Rule

23(b\(3). 1997 U.S. LEXIS 4032, at *50-51.

Moreover, the Horton class bears no resemblance to the one

Certified in Windsor. The members of the Horton class. unlike the

Windsor personal-injury class members, all allegedly suffered the

same general kind of purely economic harm: they all paid money for

policies that purportedly had been misrepresented to them, and their

losses were easily quantifiable.

9. (...continued)

District Court “failed to consider how variations in state law affect predominance

and superiority) (emphasis added); In re American Medical Sys.. 75 F 34 1069.

1085 (6th Cir. 1996) (decertifying class where District Court “failed to consider

how the law of negligence differs from jurisdiction to jurisdiction™) (emphasis

added); see also Valentino v. Carter-Wallace Inc.. 97 F_34 1227 (Sth Cir. 1996)

(reversing provisional class certification entered without any record showing

compliance with Rule 23's requirements); in re Rhone-Poulenc Rorer. inc., $1

F.3d 1293, 1300 (7th Cir.) (citing differences among states’ negligence laws as

* reasons for decertifying class. in light of unmanageability of accurately instructing

jury on laws of all SO states), cert. denied, 116 S. Ct. 184 (1995).

In addition, the Horton settlement did not pose any of the

risks of intraclass conflicts that caused concern in Windsor. The

Horton settlement offered full relief (restitution of net premiums plus

interest) to each individual class member, without any caps or any

conflicts in allocation among class members. Also, the

Horton plaintiffs, unlike the ones in Windsor, filed their action fully

intending to litigate it. The Horton settlement class thus did not have

any of the structural problems that otherwise might have prevented the

Class representatives from adequately representing the entire class.

CONCLUSION

For these reasons, the petition for a writ of certiorari should

be denied.

Respectfully submitted,

LORNA G. SCHOFIELD

(Counsel of Record)

Debevoise & Plimpton

875 Third Avenue

New York, New York 10022

Telephone: (212) 909-6000

PATRICE SMILEY ANDREWS

Metropolitan Life Insurance Company

One Madison Avenue

New York, New York 10010

Telephone: (212) 578-4935

Attomeys for Respondent

Metropolitan Life Insurance Company

July 14, 1997

TABLE OF CONTENTS

Statutory and Other Provisions ..................... la

Memorandum Order of Court, December 4, 1997......... 3a

Findings of Fact and Conclusions of Law Regarding Fairness of

Class Action Settlement, Horton v. Metropolitan Life

Insurance Co., October 25, 1994 (Exhibit C to Memorandum

of Law in Support of Motion to Transfer in Coulter v.

Spe nee ee GR C2 See OPS... 6a

Order Approving Class Action Settlement, Horton v.

Metropolitan Life Insurance Co., October 25, 1994 (Exhibit

D to Memorandum of Law in Support of Motion to Transfer

in Coulter v. Metropolitan Life Ins. Co.) ........... 23a

Final Judgment, Horton v. Metropolitan Life Insurance Co.,

October 25, 1994 (Exhibit E to Memorandum of Law in

Support of Motion to Transfer in Coulter v. Metropolitan Life

We NE oaks See soa es Ke ha he oa 27a

Order [on late exclusion requests], Horton v. Metropolitan Life

Insurance Co., October 25, 1994 (Exhibit L to

Memorandum of Law in Support of Motion to Transfer in

Coulter v. Metropolitan Life Ins. Co.) ............. 29a

Order [on motion for declaration], Horton v. Metropolitan Life

Insurance Co., October 25, 1994 (Exhibit M to

Memorandum of Law in Support of Motion to Transfer in

Coulter v. Metropolitan Life Ins. Co.) ............. 39a

STATUTORY AND OTHER PROVISIONS

United States Constitution

Amendment V.

No person shall . . . be deprived of life, liberty, or property,

without due process of law.

McCarran-Ferguson Act §§ 1-2,

1S U.S.C. §§ 1011-1012

$ 1011. Declaration of policy

§ 1012. Regulation by State law; Federal law relating specifically

to insurance; applicability of certain Federal laws after June 30,

1948 ;

(a) State regulation

The business of insurance, and every person engaged therein,

shail be subject to the laws of the several States which relate to the

regulation or taxation of such business.

(b) Federal regulation

No Act of Congress shall be construed to invalidate, impair,

or supersede any law enacted by any State for the purpose of

regulating the business of insurance, or which imposes a fee or tax

upon such business, unless such Act specifically relates to the business

of insurance: Provided, That after June 30, 1948, the Act of July 2,

1890, as amended, known as the Sherman Act, and the Act of

October 15, 1914, as amended, known as the Clayton Act, and the

Act of September 26, 1914, known as the Federal Trade Commission

Act, as amended, shall be applicable to the business of insurance to

the extent that such business is not regulated by State law.

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF PENNSYLVANIA

IN RE THE METROPOLITAN ) Master Docket No. 96-179

LIFE INSURANCE COMPANY ) MDL No. 1091

SALES PRACTICES LITIGATION )

) Judge D.W. Ambrose

) Magistrate Judge Benson

THIS DOCUMENT RELATES TO:

COULTER v. METROPOLITAN

LIFE INSURANCE COMPANY,

Civil Action No. 94-0629

and

LIFE INSURANCE COMPANY,

Civil Action No. 94-1108

and

)

ROSTEK v. METROPOLITAN )

)

CORRIERE v. METROPOLITAN )

LIFE INSURANCE COMPANY, )

Civil Action No. 96-0833 )

MEMORANDUM ORDER OF COURT

Plaintiffs Coulter (94-0629), Rostek (94-1108) and Corriere

(96-0833) have filed Motions to Amend Interlocutory Order Granting

Defendant’s Motion to Transfer (Docket #: 23 at No. 96-0833 and

Docket #: 105 at Nos. 94-0629 and 94-1108), seeking an amendment

of the Order so that an appeal from the Orders, which are

An interlocutory order should be certified for appeal where

the order “involves a controlling question of law as to which there is

substantial ground for difference of opinion. .. .” 28 U.S.C.

§ 1292(b). No such controlling question is presented by the Orders

at issue here.

Plaintiffs assert that they are entitled to collaterally attack a

class action settlement, such as the Horton settlement, in the forum of

their choice, and that this is the controlling question of law involved

in this case. Plaintiffs wish to assert that they are not members of the

class, that the class was improperly certified, and that they were not

adequately represented in the Florida action. Plaintiffs argue that I

ignored precedent which permits such collateral attacks on class action

settlements to be made in the forum of Plaintiffs’ choice. Indeed, I

have the authority to reach such questions. Jn re Real Estate Title &

Settlement Services Antitrust Litigation, 869 F.2d 760 (3d Cir. 1989).

In my view, however, this does not prevent a transfer pursuant to 28

U.S.C. § 1404(a), and my decision to transfer is not a ruling as a

matter of law that no such authority exists. A ruling pursuant to

§ 1404(a) is a matter addressed to the discretion of the court.

Jumara v. State Farm Ins. Co., 55 F.3d 873, 883 (3d Cir. 1995).

Thus, the decision in this case was discretionary, and not a question

of controlling law.

If, in fact, my ruling had been made on the basis that I lacked

jurisdiction to address the adequacy of the class settlement, then

Plaintiffs would have a point. Here, however, I determined that a

discretionary transfer was warranted pursuant to 28 U.S.C. § 1404(a),

and that, although I could address the questions presented, it would be

more appropriate for the Florida court to do so. If my power to

transfer were questioned, then perhaps certification would be

appropriate. See, Wilkins v. Erickson, 484 F.2d 969 (8th Cir. 1973)

(when issue is power of court to transfer, as opposed to discretionary

ruling, then certification would be appropriate). Thus, there is no

controlling question of law involved in this matter. Rather, there is

a discretionary ruling that does not involve a controlling question of

law.

Therefore, this 4th day of December, 1996, it is ORDERED

that the Motions of Plaintiffs Coulter, Rostek and Corriere to Amend

ya eee ne ee

aay es a aver

ane”

iid Se ais : ‘ e

Interlocutory Order Granting Defendant’s Motion to Transfer (Docket

#: 23 at No. 96-833 and Docket #: 105 at #s: 94-629 and 94-1108) are

DENIED.

BY THE COURT:

/s/ Donetta W. Ambrose

Donetta W. Ambrose,

U.S. District Judge

[Names and addresses of counsel omitted in printing. }

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF FLORIDA

TAMPA DIVISION

SHERRY HORTON, et al.,

Plaintiffs,

vs. CIV. NO. 93-1849-CIV-T-23A

METROPOLITAN LIFE

INSURANCE COMPANY,

Defendant.

FINDINGS OF FACT AND CONCLUSIONS

OF LAW REGARDING FAIRNESS

OF CLASS ACTION SETTLEMENT

Before the Court is a joint motion by the named plaintiffs and

the defendant, Metropolitan Life Insurance Company (“MetLife”), for

approval of the proposed settlement in this action. (Docket No. 35.)

This motion has been fully briefed, supported by affidavits, testimony

and documents in the record, and was the subject of a full day hearing

on July 18, 1994.

Based on these submissions, the Court makes the following

findings of fact and conclusions of law.

FINDINGS OF FACT

Background

1. On November 1, 1993, the named plaintiffs filed their

Class Action Complaint and Jury Demand. An amended complaint

followed on November 19, 1993, with a second amended complaint

on February 14, 1994 (the “Horton Complaint”). The Horton

Complaint asserted claims based on the Racketeer Influenced and

Corrupt Organizations Act, 18 U.S.C. § 1962 (“RICO”), the Florida

Civil Remedies for Criminal Practices Act, Fla. Stat. § 772. 103(1),

and the common law of fiduciary duty and fraud. The Complaint

sought rescission, restitution, treble damages, punitive damages and

attorneys’ fees and costs.

2. The central claim in this lawsuit is that certain agents of

MetLife allegedly made oral or written sales solicitations to sell whole

life insurance as retirement and/or other savings plans or vehicles

without fully disclosing that the product sold was life insurance.

3. The lawsuit was filed in the wake of inquiries into similar

allegations by the insurance departments of Florida and other states.

(See Affidavit of Alan Neiditch, sworn to June 27, 1994, 44 3-5.

Docket No. 111.)

Preliminary Court Orders

4. Before any responsive pleadings were filed, the parties

entered into a Settlement Agreement on April 4, 1994 (the

“Agreement”).!

5. The proposed settlement offers settlement class members

whose whole life policies are still in force the choice of:

* a cash refund of all premiums paid by the settlement class

member (less any amounts already paid to him or her by

MetLife, such as loans or refunds) plus interest at a rate

based on MetLife annuity interest rates (including the effect

of compounding);

* an annuity funded in the amount of all premiums paid (less

any amounts already paid by MetLife, such as loans or

refunds) plus interest; or

* — the continuation of their policies.

To class members whose policies are no longer in force, the proposed

settlement offers the cash refund. (Agreement {{ 5(b), 5(d), 5(0), 6.)

1. The Settlement Agreement is attached as Exhibit | to the parties’ joint

motion. It is cited herein as “Agreement” followed by the relevant paragraph

number.

6. The proposed settlement also provides that MetLife would

pay fees and expenses of settlement class counsel as provided in the

Agreement, over and above any amount paid to settlement class

members, as well as the administrative costs of implementing the

settlement, including the fees of the Court appointed Claims

Administrator and the costs of producing and mailing the individual

notice and publishing the publication notice. (Agreement {{ 17-18.)

7. On April 12, 1994, plaintiffs and MetLife filed a joint

motion seeking an Order certifying a settlement class, appointing

settlement class counsel, preliminarily approving the proposed

settlement, approving the form of notice to the settlement class, and

scheduling a hearing date for the Court to evaluate the settlement.

8. After hearing argument on the motion on April 19, 1994,

the court issued an Order on April 22, 1994 (Docket No. 48), inter

alia,

(a) certifying as a class under Fed. R. Civ. P. 23(b)(3),

solely for the purpose of settlement:

all persons who purchased a MetLife whole life insurance

policy as a retirement and/or other savings plan or

vehicle, based in whole or in part on written materials or

other solicitations that allegedly did not fully disclose that

these plans were life insurance products, from (a) the

Rick Urso & Associates sales office (or its predecessor

office) between January 1, 1988 and October 31, 1993,

or (b) any other sales office of MetLife between January

1, 1990 and October 31, 1993;

(b) designating settlement class counsel;

reasonable, adequate, and fair to warrant notice to the members

of the settlement class and a full hearing on the settlement;

(d) scheduling a full hearing on the settlement;

(e) approving the form of notice and accompanying

claim form;

(f) approving individual notice to an overly inclusive

group of potential settlement class members consisting of: (i) all

whole life policyholders who purchased from the Rick Urso &

Associates sales office (the “Tampa office”) between January 1,

1988 and October 31, 1993: and (ii) certain policyholders who

purchased from MetLife’s other offices between January 1, 1990

and October 31, 1993, and who were identified Statistically as

likely to be class members, or were identified empirically

(through a survey of MetLife’s sales offices and a review of sales

literature) as likely to be class members, or complained of sales

solicitations similar to those alleged in the Horton Complaint; and

(g) approving publication notice in 10 daily newspapers

throughout the United States and in two monthly nursing

magazines.

9. On April 22, 1994, the Court issued an Order, with the

consent of MetLife and settlement class counsel, permitting

intervention by the Florida Insurance Commissioner. (Docket

No. 47.)

10. On June 14, 1994, the Court issued an Order, pursuant

to Fed. R. Evid. 706, appointing an insurance expert for the purpose

of analyzing the proposed settlement to assist the Court in evaluating

the settlement. (Docket No. 96.) The expert provided consultation

to the Court without the filing of a formal report in the court record.

Notice and Response

11. The individual notice was written in plain English and

included (i) the caption, (ii) a description of the litigation, (iii) a

description of the settlement class, (iv) identification of counsel for the

Class, (v) notification of the option to enter an appearance personally

or through other counsel and the deadline for doing so, (vi) a

description of the settlement, (vii) the procedure for filing objections,

(viii) the hearing date, (ix) the procedure for filing requests for

exclusion and the deadline for doing so, (x) the consequences of filing

an exclusion request, (xi) the consequences of remaining in the

settlement class, (xii) the consequences if the settlement is or is not

10a

approved by the Court, (xiii) a description of MetLife’s responsibility

for attorneys’ fees and (xiv) the procedure for obtaining additional

information. Potential settlement class members with in force

policies, who might have been concerned about their policies as a

result of the notice, also received a letter from MetLife assuring them

that their policies are valid and that MetLife is financially secure.

(Ex. A to the Affidavit of G. Peter Buchband, sworn to July 18, 1994,

Docket No. 149.)

12. The Proof of Claim form was written in plain English.

It required those settlement class members who sought to make a

claim to certify the truth of the following statements:

a. I purchased a MetLife whole life insurance policy that was

sold to me as a retirement and/or savings plan or vehicle.

b. At or prior to the time that I made the purchase, I received

from a MetLife representative a sales solicitation that did not

fully disclose to me that the product I would receive was a

life insurance policy.

c. I was misled by this sales solicitation, and I did not

understand that I was buying a life insurance policy at the

time I bought it.

(Proof of Claim Form at 1.) In addition, the Proof of Claim form (i)

required a nota: .c2d signature, (ii) asked which settlement option the

class member wished to elect, (iii) requested surrender of the policy

and (iv) contained a release.

13. The publication notice contained (i) a description of the

litigation and the settlement class, (ii) a description of the settlement,

(iii) procedures for filing a request for exclusion and the deadline for

doing so, (iv) the hearing date and (v) the procedures for obtaining

further information and a Proof of Claim.

14. The group proposed by the parties and approved by the

Court to receive individual notice is likely to include the vast majority

of settlement class members. The methodology for identifying this

group was necessary because there is no direct way to identify

lla

policyholders based on the type of solicitation they received.

(Affidavit of Anthony Amodeo, sworn to April 12, 1994, 45, Docket

No. 40.) This methodology was the best means of identifying

settlement class members through reasonable efforts and was

developed in consultation with, and accepted by, both class counsel

and insurance regulators. (Transcript, R. Parry at 98-99; T. Tew at

101-03; Neiditch Aff. { 9.)

15. Individual notice was sent to approximately 71,000

potential settlement class members by the Court appointed Claims

Administrator. Of these, a total of 730 (1.0%) were returned

undeliverable. (Buchband Aff. ¢{ 4, 23.)

16. Notices were published in the May 9, 1994 and the May

14, 1994 issues of USA Today, New York Daily News, Los Angeles

Times, Chicago Sun-Times, Philadelphia Inquirer, Pittsburgh Post

Gazette, Miami Herald, Atlanta Journal and Constitution, Dallas

Moming News, Houston Chronicle, and Tampa Tribune; in the May

9, 1994 issue of the Birmingham News; and in the June issues of the

American Journal of Nursing and RN Magazine. These publications

on the dates published had a circulation of over 7 million. (See

Affidavits of Charles Alexander, sworn to July 1 & 18, 1994, Docket

Nos. 145 and 149.)

17. As of the hearing date, the Claims Administrator had

received a total of 20,706 timely claim forms (29.2% of claim forms

mailed) and 513 timely requests for exclusion (0.7% of individual

notices mailed). (Buchband Aff. ¢{ 20, 21, 23.) The Court has

directed the parties to meet and agree on the treatment of late filings

and, if no agreement can be reached, to submit these issues to the

Court by motion.

18. Only two settlement class members filed timely

objections to the settlement.

19. In addition, certain other persons attempted to appear and

object. However, their motions were denied as follows:

(a) The motion to intervene (Docket No. 64) by certain

former MetLife sales managers — Julio Gonzalez-Roel, Kevin P.

12a

McCarron, John C. Garcia, Vincent P. Beilman, III, and John A.

Ferrandes (“the former sales managers”) — was denied.

(b) The motion to intervene (Docket No. 77) by Ronald

and Anissa Coulter (the “Coulters”) was denied. The Coulters

also filed a notice of intention to appear and object (Docket No.

119) on July 1, 1994. This “*yection was untimely, although this

untimeliness does not affect their status as settlement class

members. Pursuant to this Court’s April 22, 1994 Order,

objections and supporting memoranda were due to be filed on or

before June 13, 1994. (Docket No. 48, { 10.)

106) to dismiss the notices of intention to appear and object to

proposed class settlement filed by the former sales managers

(excluding Mr. Ferrandes), by Kevin J. Daxon (“Daxon”), and

by Daniel Richard Urso (“Urso”) was granted. Specifically,

Daxon’s notice of intention to appear and object (Docket No. 89)

was dismissed for lack of standing. Urso’s notice of intention to

appear and object (Docket No. 94) was dismissed for lack of

standing. The former sales managers’ notice of intention to

appear and object (Docket No. 58) was dismissed by stipulation

that the former sales managers are not settlement class members.

(See Order on Motions to Intervene and to Dismiss Notices of

Intention to Appear and Object of Certain Purported Class Members,

Docket No. 219.)

Final Settlement Hearing

20. On July 18, 1994, the Court conducted a full day hearing

on the fairness of the settlement and related issues, which the parties

had fully briefed.

21. At the hearing, the Court heard and considered the

objections of the two settlement class members who objected in a

timely fashion, the former sales managers, the Coulters, Urso and

Daxon before disposing of the motions as described above.

13a

22. At the hearing, class counsel called as a witness David

Donaldson, an experienced plaintiffs’ class action lawyer from the

Ritchie & Rediker firm in Birmingham, Alabama, who testified that

the settlement was fair and that the form of individual notice was clear

and easily understood. (Transcript, Donaldson at 136-38.) Class

counsel had previously filed an affidavit of Mr. Donaldson’s partner,

David Guin (Docket No. 143), reflecting his view that the settlement

was fair.

23. At the hearing, MetLife called as a witness Daniel J.

McCarthy, a consulting actuary with the firm of Milliman &

Robertson, experienced in life insurance Matters, who explained

features of the settlement and testified that the settlement, including

each of the settlement options as well as the interest rate, was fair and

that the individual notice was likely to reach the vast majority of the

settlement class. (Transcript, McCarthy at 177-94.)

24. MetLife has committed and confirmed at the July 18,

1994 hearing (see Transcript at 200) that it will either (i) provide

Restitution (as defined in the Settlement Agreement) to class members

who withdrew from the Florida Prepaid Tuition Program or, at the

option of the settlement class member, (ii) to the extent permitted by

the Florida Prepaid Tuition Program, obtain those persons’

reinstatement in that Program.

Facts Relating to the Fairness of the Settlement

25. The settlement offers full restitution to settlement ciass

members. The settlement is at the top of the range of possible

compensatory damages. It is not discounted to reflect the risks,

delays or costs of litigation.

26. The following are issues that could present obstacles to

plaintiffs’ success at trial (which obstacles might or might not be

overcome) if this matter were to proceed in litigation:

* establishing the elements necessary to obtain class

certification, if this case were litigated rather than settled:

14a

* proving that any settlement class member was unaware that

he or she had purchased life insurance in vicw of written

disclosures made to and acknowledgements signed by

settlement class members;

¢ overcoming the defense that their RICO claims are precluded

by the McCarran-Ferguson Act;

* overcoming the defense that their Florida Civil Remedies for

Criminal Practices Act claims are precluded by the Florida

Unfair Insurance Trade Practices Act;

¢ establishing the necessary elements of their RICO, Florida

Civil Remedies for Criminal Practices Act and common law

claims; and

* establishing that settlement class members’ claims are timely

under applicable statutes of limitations.

27. This action, if litigated, would be complex, expensive

and time-consuming.

28. Negotiations leading to the settlement lasted several

months and, at times, were acrimonious. (See Affidavit of Lorna G.

Schofield, sworn to June 27, 1994, Docket No. 117; Affidavits of Ron

Parry, sworn to April 19, 1994, Docket No. 45, and June 28, 1994,

Docket No. 109, Ex. C; Affidavit of Judy $. Hoyer, sworn to April

7, 1994, Docket No. 109, Ex. D.) There is no evidence of collusion.

29. More than 40 state insurance regulators have approved

the substance of the proposed settlement, including the settlement

amount and the methods for identifying those persons who received

individual notice. (Neiditch Aff. {4 2, 8-9.)

1Sa

CONCLUSIONS OF LAW

Subject Matter Jurisdiction

30. The Court has jurisdiction over the federal Claims under

18 U.S.C. § 1964(c) and 28 U.S.C. § 1331.

31. The Court has supplemental jurisdiction over the state

law claims under 28 U.S.C. § 1367.

32. In arguing the weaknesses in plaintiffs’ case, MetLife has

asserted that the McCarran-Ferguson Act precludes plaintiffs’ RICO

claims. Plaintiffs have disputed this issue. In either event, the Court

has subject matter jurisdiction. Even if MetLife is correct, the Court

has subject matter jurisdiction because the federal Claims alleged in

this Complaint are not devoid of merit on their face. See Nelson v.

Greater Gadsden Housing Auth. , 802 F.2d 405, 408 (11th Cir. 1986).

Moreover, successfully asserting the McCarran-Ferguson Act as an

affirmative defense would result in the dismissal of plaintiffs’ RICO

Claims on the merits for failure to state a claim, and not for lack of

subject-matter jurisdiction. Dexter v. Equitable Life Assurance Soc’y,

527 F.2d 233, 236-37 (2d Cir. 1975).

33. The Court also has determined to exercise its

supplemental jurisdiction over state law claims in this case in the

interests of judicial economy, convenience, and fairness to litigants,

particularly the more than 20,000 who have filed Proof of Claim

forms and indicated their desire to accept the restitution set forth in

the Settlement Agreement.

Class Certification

34. The certified settlement class is sufficient under Fed. R.

Civ. P. 23 for settlement purposes. The standards of Rule 23 for

Class Certification are more easily met in the context of settlement than

in the context of contested litigation. White v. National Football

League, 822 F. Supp. 1389, 1402 (D. Minn. 1993); Bowling v.

Pfizer, Inc., 143 F.R.D. 141, 157-158 (S.D. Ohio 1992); Dalkon

Shield Claimants’ Comm. v. Aetna Cas. & Sur. Co. (In re A.H.

16a

Robins Co.}, 85 B.R. 373, 378 (E.D. Va. 1988), aff'd, 880 F.2d 709

(4th Cir.), cert. denied, 493 U.S. 959 (1989).

Adequacy of Notice

35. Elements of Rule 23(c)(2) notice (for class certification)

are combined with elements of Rule 23(e) notice (for notice of

settlement or dismissal) where, as here, the parties have sought

simultaneously to certify a settlement class and settle a class action.

Hitt v. Nissan Motor Co. (In re Nissan Motor Corp. Antitrust Litig.),

552 F.2d 1088 (Sth Cir. 1977).

36. The notices to potential class members provided all the

information material to making an informed and intelligent decision

whether to participate in the settlement class and the settlement. See

id. at 1105. This notice fairly and reasonably advised potential class

members of their rights under the settlement, and constituted due and

sufficient notice for all other purposes to persons entitled to receive

notice required by due process and Rule 23.

37. The methodology used to identify potential class

members to receive individual notice was “the best notice practicable

under the circumstances, including individual notice to all members

who can be identified through reasonable effort.” Fed. R. Civ. P.

23(c)(2). Rule 23 does not require actual notice to each and every

possible class member where, as here, a precise list of actual

settlement class members could not be created. In re Agent Orange

Prod. Liab. Litig., 818 F.2d 145, 168 (2d Cir. 1987), cert. denied,

484 U.S. 1004 (1988); Burns v. Elrod, 757 F.2d 151, 154 (7th Cir.

1985). Supplementing individual notice with publication notice

represents an appropriate balance between protecting class members

and making Rule 23 workable. See Tulsa Professional Collection

Servs., Inc. v. Pope, 485 U.S. 478, 490 (1988); In re Agent Orange,

818 F.2d at 168-69; Manual for Complex Litigation, Second § 30.21

at 223 (1986). The Court concludes that the individual notice and

publication notice collectively constituted the most effective and

practicable notice under the circumstances of the pendency of the class

action, proposed settlement and settlement hearing, and thereby

satisfied the requirements of Rule 23(c)(2) (as well as Rule 23(e)).

17a

Objections

38. Two settlement class members filed timely objections to

the settlement with the Court. They asserted, respectively, that (a) the

settlement should provide for punitive damages, and (b) the annuity

is insufficient settlement relief. These Objections were considered and

are rejected because the settlement provides 100% of compensatory

damages, and punitive and treble damages are not to be considered in

determining the upper range of possible recovery for settlement

purposes. In re Domestic Air Transp. Antitrust Litig., 148 F.R.D.

297, 319 n.25 (N.D. Ga. 1993); Namoff v. Merrill Lynch, Pierce,

Fenner & Smith (in re Dennis Greenman Sec. Litig.), 622 F. Supp.

1430, 1441 (S.D. Fla. 1985), rev'd on other grounds, 829 F.2d 1539

(11th Cir. 1987).

39. The objections raised by the Coulters, although not

timely filed, were considered and rejected. The Coulters’ objection

merely refers back to their motion to intervene and supporting

arguments, which were briefed, argued and rejected. (See Order on

Motions to Intervene and to Dismiss Notices of Intention to Appear

and Object of Certain Purported Class Members, Docket No. 219.)

40. The Court considered the objections raised by the former

Sales managers and Daxon, even though they are not class members

and lack standing to raise the objections. (See Order on Motions to

Intervene and to Dismiss Notices of Intention to Appear and Object of

Certain Purported Class Members, Docket No. 219.) Certain of

those objections are antithetical to the interests of the settlement class

and are rejected.

41. The remaining objections of the former sales managers

and Daxon are as follows:

(a) They objected that the notice does not adequately warn

class members of the risks of surrendering their whole life insurance

policies and claiming a full refund. This objection is rejected. The

notice clearly presented the settlement options and warned

policyholders to consider carefully whether cancellation of their life

insurance was in their best interests. Such notice is legally sufficient.

18a

Grunin v. International House of Pancakes, 513 F.2d 114, 122 (8th

Cir. 1974) (fact that notices do not fully explore options is immaterial

because Class members “are not expected to rely upon the notices as

a complete source of settlement information”), cert. denied, 423 U.S.

864 (1975); Battle v. Liberty Nat’l Life Ins. Co., 770 F. Supp. 1499,

1522 (N.D. Ala. 1991) (denying movants’ claim that settlement notice

was misleading and/or incomplete because it allegedly did not explain

effect of settlement provisions on policyholders), aff'd, 974 F.2d 1279

(11th Cir. 1992), cert. denied, 113 S. Ct. 2999 (1993). The Court

concludes that additional information about settlement options would

have made the notice lengthy, confusing and would have been

inappropriate, particularly in light of the nature of the allegations

asserted in this action. See In re Farmers Group Stock Options Litig. ,

[1991-1992] Fed. Sec. L. Rep. (CCH) { 96,522, at 92,378 (E.D. Pa.

Dec. 19, 1991) (settlement notice must “be neutral in its description

of class member options”; fuller details of settlement options would

have “counterproductively engendered confusion” given the specu-

lative nature of information, especially where class members

presumably could consult with their own brokers if they had questions

regarding settlement).

(b) The former sales managers and Daxon objected that the

release as set forth in the proof of claim is overly broad in that it

could cover derivative claims. This objection is rejected. Derivative

claims belong to and are brought on behalf of the corporation, and not

any individual. See, e.g., Fed. R. Civ. P. 23.1. Derivative claims

on behalf of the company relating to the sales solicitations at issue

have already been asserted. (See, e.g., Derivative Complaint, Ex. B

to the former sales managers’ Objection, Docket No. 35.) If those

claims result in a recovery in favor of the company, those funds will

be paid to the company and not to any individual. See, e.g., In re

General Tire & Rubber Co. Sec. Litig., 726 F.2d 1075, 1087 (6th

Cir.) (“Any relief obtained [in a derivative action] belongs to the

corporation only”), cert. denied, 469 U.S. 858 (1984); Recchion ex

rel. Westinghouse Elec. Corp. v. Kirby, 637 F. Supp. 1309, 1315 n.1

(W.D. Pa. 1986) (“Any recovery in a derivative action belongs to the

corporation,” citing Ross v. Bernhard, 396 U.S. 531, 538 (1970)).

19a

Settlement class includes either too many or too few potential

Claimants. This objection is rejected. No precise list of settlement

Class members can be compiled because the parties cannot determine

which policyholders received (and relied on) allegedly misleading

Sales solicitations. (Amodeo Aff. { 5.) Individual notice was

provided to an overly broad group of potential settlement class

members and was supplemented by broad publication notice. As

stated above, the Court has concluded that this notice was “the best

notice practicable under the circumstances, including individual notice

to all members who can be identified through reasonable effort.”

Fed. R. Civ. P. 23(c)(2). Notice to a greatly overinclusive group of

all MetLife whole life policyholders is unwarranted and impractical

because the vast majority of those persons probably knew they were

buying life insurance and were not misled by allegedly improper sales

solicitations. See In re Agent Orange Prod. Liab. Litig., 818 F.2d

145, 169 (2d Cir. 1987), cert. denied, 484 U.S. 1004 (1988) (court

did not require individual notice to every Vietnam veteran in order to

reach a Class consisting of such veterans who had been exposed to

Agent Orange).

(d) The former sales managers and Daxon objected that the

settlement is collusive. This objection is rejected as baseless. No

evidence of collusion exists.

(€) The former sales managers objected that the class

definition is inconsistent with the Proof of Claim form in that the latter

includes a requirement that a class member certify that he or she had

been misled, even though the class definition does not do so. This

objection is rejected because the settlement class is properly defined

in objective terms. Class membership should not depend on a

determination of the merits of each potential class member’s claims.

Manual for Complex Litigation, Second § 30.14 (1986). Moreover,

the settlement class was certified for the sole purpose of resolving the

Claims asserted in the Complaint, which in substance allege that

policyholders were misled in the purchase of their whole life

insurance policies. Thus, class members who sought to make a claim

were appropriately required to assert that they were misled in the

20a

purchase of their policy and did not understand that they were buying

a life insurance policy at the time they purchased it in order to

participate in the settlement.

42. Urso asserted substantially the same objection concerning

the certification required in the Proof of Claim form. The Court has

considered and rejects the objection for the reasons stated above, even

though Urso is not a settlement class member and therefore lacks

standing to raise the objection. (See Order on Motions to Intervene

and to Dismiss Notices of Intention to Appear and Object of Certain

Purported Class Members, Docket No. 219.)

Fairness of Settlement

43. There are six factors to consider in determining whether

a Class action settlement is fair and adequate. Bennett v. Behring

Corp. , 737 F.2d 982, 986 (11th Cir. 1984); Cotton v. Hinton, 559

F.2d 1326, 1330-31 (Sth Cir. 1977). These factors support approval

of the settlement in this case.

44. (First factor:) The risk that plaintiffs would lose on the

merits at trial supports approval of the settlement. See Bennett, 737

F.2d at 986.

45. (Second and third factors:) The amount of the

settlement, which here is at the upper end of the range of possible

recovery, supports approval of the settlement. Bennett, 737 F.2d at

986; Marshall v. Holiday Magic, Inc., 550 F.2d 1173, 1178 (9th Cir.

1977).

46. (Fourth factor:) The prospect of complicated, expensive

and time-consuming litigation if the case were not settled supports

approval of the settlement. Bennett, 737 F.2d at 986; Warren v. City

of Tampa, 693 F. Supp. 1051, 1059 (M.D. Fla. 1988), aff'd, 893

F.2d 347 (11th Cir. 1989).

47. (Fifth factor:) The virtual lack of objections from

settlement class members, and the lack of substance of objections that

were made, support approval of the settlement. Bennett, 737 F.2d at

986, 988 & n.10; In re Beef Indus. Antitrust Litig., 607 F.2d 167, 180

2la

(Sth Cir. 1979), cert. denied, 452 U.S. 905 (1981): Meyer v. Citizens

& Southern Nat’! Bank, 677 F. Supp. 1196, 1212 (M.D. Ga. 1988).

48. (Sixth factor:) The stage of the proceedings at which the

settlement was achieved, prior to formal discovery, does not weigh

against approval of the settlement. Adams Extract Co. v. Pleasure

Hours, Inc. (In re Corrugated Container Antitrust Litig.), 643 F.2d

195, 211 (Sth Cir. April 1981); Cotton, 559 F.2d at 1332. Here the

settlement was not discounted to reflect the risk of loss, and class

counsel had access to a great deal of other information, obtained from

such sources as extensive press reports, their own clients. and the

report of Thomas Tew on behalf of the Florida Commissioner of

Insurance. (See generally Parry Aff. ¢ 12, Docket No. 109.)

49. The absence of evidence that the settlement is the product

of anything other than arm’s-length, non-collusive negotiations

Supports approval of the settlement. Cotton, 559 F.2d at 1330:

Behrens v. Wometco Enters., 118 F.R.D. 534, 538 (S.D. Fla. 1988),

aff'd, 899 F.2d 21 (11th Cir. 1990): Warren, 693 F. Supp. at 1055.

50. The Court has given weight to the views of counsel who

negotiated the settlement as to the merits of the settlement. See

Cotton, 559 F.2d at 1330; Ressler v. Jacobson, 822 F. Supp. 1551,

1552 (M.D. Fla. 1992). The Court has also considered the views of

experts who have examined the settlement and found it to be fair and

adequate.

51. In addition, the Court has considered and accorded great

weight to the approval given to the restitution plan embodied in the

Settlement by more than 40 independent state insurance regulators

around the country as evidence that the settlement is fair and was the

product of arm's-length, non-collusive negotiations. See Marshall.

550 F.2d at 1178; Scholes v. Stone, McGuire & Benjamin, 839 F.

Supp. 1314, 1318 (N.D. Ill. 1993).

52. The settlement is fair, adequate and reasonable and not

the product of collusion between the parties.

In Tampa, Florida, on October 25th, 1994.

22a

__/s/ Steven D. Merryday

STEVEN D. MERRYDAY

UNITED STATES DISTRICT JUDGE

23a

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF FLORIDA

TAMPA DIVISION

SHERRY HORTON, et al.,

Plaintiffs,

VS. CIV. NO. 93-1849-CIV-T-23A

METROPOLITAN LIFE

INSURANCE COMPANY,

Defendant.

ORDER APPROVING

CLASS ACTION SETTLEMENT

Before the Court is a joint motion (Docket No. 35) by the

named plaintiffs and the defendant, Metropolitan Life Insurance

Company (“MetLife”) for approval of a proposed settlement

pertaining to a settlement class consisting of:

all persons who purchased a MetLife whole life insurance

policy as a retirement and/or other savings plan or vehicle,

based in whole or in part on written materials or other

solicitations that allegedly did not fully disclose that these

plans were life insurance products, from (a) the Rick Urso &

Associates sales office (or its predecessor office) between

January 1, 1988 and October 31, 1993, or (b) any other sales

office of MetLife between January 1, 1990 and October 31,

1993,

which was certified by Order of this Court dated April 22, 1994,

under Rule 23(b)(3), Fed. R. Civ. P., solely for the purpose of

settlement. The joint motion for approval of the settlement was fully

briefed, supported by affidavits, testimony and documents in the

record, and was the subject of a full-day hearing on July 18, 1994.

24a

Based on these submissions, and the Court’s Findings of Fact

and Conclusions of Law Regarding Fairness of Class Action

Settlement rendered herewith,

IT IS HEREBY ORDERED that:

1. The settlement as evidenced by the parties’ Settlement

Agreement, dated April 4, 1994, is hereby determined to be fair,

reasonable and adequate, and the parties are directed to comply with

and consummate its terms.

2. Notice of the settlement to potential settlement class

members, given in the form and manner provided in this Court's

Order of April 22, 1994 (Docket No. 48), is hereby determined to

have constituted the most effective and practicable notice under the

circumstances of the pendency of the class action, proposed settlement

and settlement hearing. This notice fairly and reasonably advised

potential class members of their rights under the settlement and

constituted due and sufficient notice for all other purposes to persons

entitled to receive notice required by due process and Rule 23 of the

Federal Rules of Civil Procedure.

3. The Proof of Claim form previously approved by the

Court fairly and reasonably advised potential class members of their

options if they wished to participate in the settlement and in a manner

that neither encouraged nor discouraged potential class members from

electing any particular settlement aivernative. In addition, the Proof

of Claim form fairly and effectively solicited information needed to

determine whether persons submitting the form were eligible for

settlement class relief.

4. The Settlement Agreement is and shall be binding on all

settlement class members.

5. MetLife, its past, present and future officers, directors,

employees, agents, representatives, and its predecessors, successors,

parents, subsidiaries, partners, corporate affiliates, successors in

interest and assigns, together with the respective past, present and

future officers, directors, employees, agents and representatives of

any or all of them (“MetLife and its Affiliates”), are forever

25a

discharged from any and all causes of action, claims, damages,

equitable and legal relief, demands or rights that (i) have been or

could have been asserted by Sherry Horton, Joyce Armbruster or

Deborah K. Spamer (the “Named Plaintiffs”), other settlement class

members or the settlement class in this action or (ii) have been, could

have been, may be or could be alleged or asserted by any of the

Named Plaintiffs, other settlement class members or the settlement

class against MetLife and its Affiliates, or any of them, now or

hereafter, on the basis of, connected with, arising out of, or related

in whole or in part to any or all of the acts. omissions, facts, matters,

transactions or occurrences that were directly or indirectly alleged,

asserted, described, set forth or referred to in this action or that are

related to sales solicitations described in the Second Amended

Complaint (“Sales Solicitations”) or the purchase of Whole Life

Policies (defined as policies designated by MetLife as Whole Life,

Life Paid Up at 95 or Life Paid Up at 98), including without limitation

any and all claims for damages, rescission, equitable and legal relief,

attorneys’ fees, costs or disbursements incurred by any person or

entity in connection with or related in any manner to this action, the

settlement thereof, the administration of this settlement, the Sales

Solicitations or the purchase of Whole Life Policies, provided,

however, that nothing herein is intended to bar any action to enforce

the Settlement Agreement in accordance with its terms.

6. All claims of plaintiffs and settlement class members in

this action are dismissed on the merits and with prejudice, without

Costs to any party except as provided in the Settlement Agreement.

7. The Court expressly retains jurisdiction over the

administration of the settlement for the purposes of (7) supervising the

Restitution, as defined in the Settlement Agreement and as stipulated

by MetLife at the July 18, 1994 hearing with respect to Settlement

Class Members who withdrew from the Florida Prepaid Tuition

Program; (i) ruling upon any application by settlement class counsel

for an award of attorneys’ fees; (iii) otherwise enforcing the terms and

conditions of the Settlement Agreement and resolving any disputes,

claims or causes of action that, in whole or in part, are related to or

arise Out of the Settlement Agreement, Final Judgment or this Order:

26a

(iv) entering such additional orders as may be appropriate or

necessary to protect or effectuate the Court’s Order and Final

Judgment approving the terms of the Settlement Agreement and

dismissing claims thereunder, and to ensure the fair and orderly

administration of this settlement; and (v) any other appropriate or

necessary purpose, and the Court reserves the power to protect and

effectuate this Order and Final Judgment and to enter such orders as

may be necessary in aid of its continuing jurisdiction.

ORDERED in Tampa, Florida, on October 25th, 1994.

__/s/ Steven D. Merryday_

STEVEN D. MERRYDAY

UNITED STATES DISTRICT JUDGE

27a

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF FLORIDA

TAMPA DIVISION

SHERRY HORTON, et al.,

Plaintiffs,

vs. CIV. NO. 93-1849-CIV-T-23A

METROPOLITAN LIFE

INSURANCE COMPANY,

Defendant.

FINAL JUDGMENT

WHEREAS plaintiffs and defendant entered into an

agreement for the settlement of this class action, dated April 4, 1994:

and

WHEREAS the Court granted certification of a settlement

Class, and ordered individual and publication notice to potential class

members that provided such potential class members an opportunity

to exclude themselves from or object to the settlement, on April 22,

1994; and

WHEREAS the parties have jointly moved for final approval

of the settlement and for dismissal of the action; and

WHEREAS the parties’ motion was briefed fully, supported

by affidavits, testimony and documents, and was the subject of a full

day hearing before this Court on July 18, 1994, at which settlement

Class members and others were afforded an Opportunity to object to

the settlement; and

WHEREAS the Court has found the settlement to be a fair

resolution of this class action, has entered findings of fact and

conclusions of law to that effect, and has entered an order approving

28a

the settlement and dismissing the settlement class members’ claims;

therefore,

IT IS HEREBY ADJUDGED AND DECREED THAT:

1. The settlement of this class action on the terms set forth

in the parties’ Settlement Agreement is approved, for the reasons set

forth in this Court’s Order Approving Class Action Settlement, dated

10/25/94, and its Findings of Fact and Conclusions of Law, dated

10/25/94.

2. The claims in this action are dismissed on the merits and

with prejudice on the terms set forth in the parties’ Settlement

Agreement, without costs to any party except as provided therein.

3. The Court will retain jurisdiction over this action for the

purposes set forth in this Court’s Order Approving Class Action

Settlement, dated 10/25/94.

4. There being no just reason for delay, this document shall

constitute the final judgment on these claims for the purposes of Fed.

R. Civ. P. 54(b).

ORDERED in Tampa, Florida, on October 25th, 1994.

___/s/ Steven D. Merryday

STEVEN D. MERRYDAY

UNITED STATES DISTRICT JUDGE

29a

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF FLORIDA

TAMPA DIVISION

SHERRY HORTON, et al.,

Plaintiffs,

VS. CIV. NO. 93-1849-CIV-T-23A

METROPOLITAN LIFE

INSURANCE COMPANY,

Defendant.

ORDER

The following class members filed requests for enlargement

of time within which to seek exclusion from the class (“requests”):

John Romano (Doc. 119B), Terrance J. McDonnell (Doc. 119C),

Joann Kablach (Doc. 119D), Myrna Lesueur (Doc. 119E), Brian T.

Rohm (Doc. 119F), Douglas and Roena Conner (Doc. 119G),

Marjorie Palmer (Doc. 119H), Terry A. Palmer (Doc. 1991),

Deborah R. Myers (Doc. Doc. 159), Darrin L. Johns (Doc. 160),

Anissa and Ronald Coulter (Doc. 174), Jeanne Yokel (Doc. 175),

Eric Maharg (Doc. 176), and Albert Darren Wise (Doc. 177)

(collectively, the “applicants”).

Each of the requests were filed by attorney Kenneth Behrend.

The applicants seek to exclude themselves from the class even though

they failed to comply with the provisions of the settlement agreement

(Doc. 35) and applicable order (Doc. 48). Both the agreement and

order require that class members electing exclusion send to the Claims

Administrator a “request for exclusion” postmarked on or before June

13, 1994.

None of the applicants questions the need for a deadline or the

appropriateness of the June 13, 1994, deadline. The applicants

30a

suggest simply that they should be provided additional time to exclude

themselves because they have shown “excusable neglect” under Rule

6(b)(2), Federal Rules of Civil Procedure. The excusable neglect

standard applies to the requests because they were filed after the

expiration of time for seeking exclusion.

The determination of whether the time for exclusion should

be enlarged is left to the district court’s sound discretion. See, e.g.,

Davidson v. Keenan, 740 F.2d 129 (2d Cir. 1984). “To sustain a

finding of excusable neglect, the party seeking the enlargement of

time bears the burden of proving both good faith and a reasonable

basis for not complying within the specified period.” Breslow v.

Prudential-Bache Props., Inc., 1994 WL 478611, *3 (N.D. Ill. Sept.

1, 1994) (emphasis added). The class action deadline serves an

important function and should not be disturbed casually. Jd. For the

following reasons, the applicants’ requests are DENIED. !

Before addressing the individual requests, considering the

prejudice, if any, the respective parties may suffer by denying the

requested relief is worthwhile. In its response (Doc. 190), Metlife

offers the applicants the same settlement options that were available

initially to them even though the time for submitting a completed

1. This ruling is based on the merits. In its response (Doc. 190), Metlife

seeks denial of the requests based, in part, on procedural grounds. Metlife asserts

that the “requests” are fatally defective because they are not styled as “motions.”

Without citing to any case authority, Metlife suggests that, to give effect to the

difference between Rule 6(6)(1), which allows an enlargement of time based

simply on a request, and Rule 6(b)(2), which requires a motion, the applicants’

papers must be styled as motions. Here, the difference is inconsequential. The

parties have been provided an opportunity to respond to the requests regardless of

how they are designated. Accordingly, Metlife’s procedural argument is

unavailing. For purposes of this order, the applicants’ requests are construed as

motions and denied on the merits. A procedural basis for denying the requests is

the applicants’ failure to comply with Local Rule 3.01(g). However, in light of

| Metlife’s response (Doc. 190), requiring the parties to confer in good faith appears

futile. For this reason, the requests are considered despite the applicants’ non-

compliance with the Local Rules.

i iiaeaiaeaiaiatatiiaiaiemaiiiatatiiaeibiia iia

3la

proof of claim form has passed.” In a separate order, the terms of the

settlement agreement, including the cash refund and annuity options,

are held fair, reasonable, adequate, and in the best interest of the class

members. Therefore, precluding the applicants from opting out of the

class at this time will cause them no cognizable prejudice. In fact,

many of the applicants request a cash refund as alternative relief.

On the other hand, allowing class exclusions at this late stage

will cause severe prejudice to Metlife. The settlement agreement

reflects the parties bargained-for expectations. The opt-out deadline

is a material provision of the settlement agreement. That deadline

provided Metlife with an opportunity to determine the potential

number of claims that may remain unresolved and to evaluate the

Objections to the proposed settlement. Prior to the fairness hearing,

Metlife had the ability to assess that information and, pursuant to the

terms of the settlement agreement, to terminate the proposed

settlement. Metlife no longer has the right to consider the applicants’

Claims and decide whether to terminate the agreement.

From Metlife’s perspective, a bargained-for purpose of the

$76 million agreement is to litigate the asserted claims in one forum

and to bring finality to those claims. Allowing untimely exclusions

without sufficient cause and forcing Metlife to litigate elsewhere

would not only frustrate the purposes of the court-approved settlement

and undermine the Court’s orders but would be fundamentally unfair

to Metlife, which is attempting to resolve all pending claims.

The first group of applicants to be considered are those class

members who allege that they failed to submit their requests for

exclusion on or before June 13, 1994, because the proof of claim

form is allegedly confusing. Their argument is without merit. The

Class notice, which accompanied the claim form and was approved by

this Court, states clearly that a class member, to be excluded from the

Class, must submit to the Claims Administrator a request for exclusion

2. Metlife is now bound to offer the applicants the option of either the cash

refund or the annuity. Upon entry of this order, the applicants may contact

counsel for Metlife to discuss submitting a completed claim form and electing one

of the options.

32a

postmarked on or before June 13, 1994. The claim form, which is

equally clear, addresses the procedure for electing the cash refund and

annuity options, and not the procedure for opting-out.

As a matter of law, misunderstanding the language of a court-

approved class notice and claim form fails to constitute excusable

neglect for purposes of Rule 6(b)(2). See In re VMS Secs. Litig.,

1992 WL 203832, *3-4 (N.D. Ill. Aug. 13, 1992). If class members

needed additional information, they could have contacted class counsel

or the Claims Administrator. The class notice specifically informed

the class members that those resources were available for free.

Alternatively, class members who were unable to understand the class

notice or claim form could have consulted with their attorney. See In

re VMS Ltd. Partnership Secs. Litig., 26 F.3d 50, 51-2 (7th Cir.

1994).

Accordingly, the requests for enlargement filed by class

members Terrance J. McDonnell (Doc. 119C), Myrna Lesueur (Doc.

119E), Brian T. Rohm (Doc. 119F), Douglas and Roena Conner

(Doc. 119G), Marjorie Palmer (Doc. 119H), Terry A. Palmer (Doc.

1991), and Albert Darren Wise (Doc. 177) fail to establish excusable

neglect and are denied. Except for Wise, each of these applicants

requests the cash refund as alternative relief. Inasmuch as Metlife

must offer either the cash refund or the annuity, the applicants will be

receiving, in part, their requested relief.

Class members Deborah R. Myers and Darrin L. Johns filed

their requests for enlargement (Docs. 159 and 160, respectively) on

August 8, 1994. In their requests, both Myers and Johns assert that

they met with their attorney, Kenneth Behrend, well before the June

13, 1994, deadline and expressed to him their desire to be excluded

from the class. Due to some undefined “clerical error,” their attorney

did not submit requests for exclusion to the Claims Administrator.

The requests for enlargement filed by Myers and Johns fail

to establish excusable neglect. Their assertions are not supported by

an affidavit or some other admissible evidence. Additionally,

assuming the assertions are true, inadvertence of counsel generally

fails to constitute excusable neglect. See, e.g., Davidson v. Keenan,

33a

740 F.2d 129, 132 (2d Cir. 1984): Jones v. Siegfried Constr. Co.,

Inc., 105 F.R.D. 491, 492 (W.D.N.Y. 1984), aff'd, 792 F.2d 136 (2d

Cir.), cert. den. sub nom. Jones v. Niagara Frontier Transp. Auth. ,

479 U.S. 932, 107 S. Ct. 404 (1986). Myers and John explain neither

the alleged “clerical error” nor the eight-week period that lapsed

before attempting to correct the error. Accordingly, the requests for

enlargement filed by Myers (Doc. 159) and Johns (Doc. 160) are

denied.

Joann Kablach’s request (Doc. 119D) fails to show excusable

neglect. Kablach avers that she was unable to submit a timely request

for exclusion because she did not receive a class notice and claim

form packet until June 17, 1994. However, Kablach fails to mention

that she did not request a packet until June 16, 1994. See q 6(c) of

Goldsmith Affidavit (Doc. 191). Conspicuously missing from

Kablach’s request is the date she met with her attorney and learned

about the June 13, 1994, deadline. For these reasons, Kablach’s

request (Doc. 119D) is denied.

In his unverified request (Doc. 176), Eric Maharg states that

he failed to submit a timely request for exclusion because he

reasonably relied (1) on a form letter and pamphlet that he received

from his Metlife sales agent and (2) on alleged representations made

by his Metlife sales agent in relation to the pamphlet.

The form letter, dated March 31, 1994, discussed simply the

availability of “up-to-date” information regarding Maharg’s policy

(¢.g., Current cash value). The pamphlet prepared my Metlife advises

policyholders that the controversy over sales practices would not

affect the financial security of the company’s products. The pamphlet

also discusses Metlife’s response to investigations by state regulators

and the company’s financial strength. The purported representation

made by Metlife’s sales agent allegedly includes assurances that

Maharg’s policy is unrelated to the policies sold in Florida and

suggests that he refrain from taking action in the Florida proceeding.

34a

Maharg’s claim of reasonable reliance is without merit.*

Reliance on a defendant's account agent (for purposes pertinent to this

Case) is unreasonable and fails to constitute excusable neglect. See In

re VMS Ltd. Partnership Secs. Litig. , 26 F.3d 50, 52 (7th Cir. 1994).

Moreover, neither the March 31 letter, the accompanying pamphlet,

nor the ensuing conversation with the Metlife sales agent could have

possibly suggested to Maharg that he ignore the June 13, 1994,

deadline to exclude himself from the class. The parties did not enter

the settlement agreement until April 6, 1994. More important, the

settlement class was not certified and the June 13, 1994, deadline was

not established until April 22, 1994. Further, nothing in the March

31 letter or pamphlet even remotely suggests that Maharg refrain from

excluding himself from this class action lawsuit.

Assuming that the Metlife sales agent suggested to Maharg

that he refrain from participating in the Florida proceedings described

in the pamphlet, that suggestion is of no consequence. The

proceedings described in the pamphlet are a regulatory investigation

conducted by the Florida Insurance Department, an in-house

investigation conducted by Metlife, internal changes made by Metlife

as a result of its in-house investigation, and a program implemented

voluntarily by Metlife to provide restitution to policyholders who

purchased whole life insurance from the Tampa office. Maharg could

not have participated in these proceedings. The Metlife sales agent

has no recollection of telling Maharg or any other policyholder that

they should refrain from participating in this class action lawsuit. See

Affidavit of Mathew A. Badger (Doc. 203).

Finally, Maharg purportedly learned about the June 13, 1994,

deadline in August when he consulted with attorney Kenneth Behrend.

If Maharg could consult with an attorney in August, he could have

consulted with an attorney before the June 13 deadline. Maharg

should have consulted a competent, independent professional with his

3. Because Maharg fails to show reasonable reliance, the remaining two

elements of equitable estoppel (i.e., misrepresentation, detrimental reliance) need

not be considered.

35a

legal questions. He should not have relied (assuming he did) on his

Metlife sales agent, the person with whom he allegedly had a dispute.

Maharg has not and cannot assert that he was unaware of this

Class action and the settlement options. The Claims Administrator

sent Maharg a class notice. See Affidavit of G. Peter Buchband (Doc.

202); Affidavit of Lawrence A. Vranka (Doc. 201). Whether Maharg

actually received the notice is irrelevant so long as Metlife complied

with the court-approved notice procedures. See In re VMS Secs.

Litig., 1994 WL 386397, *3 (N.D. Il. July 20, 1994). Even if

Maharg’s unsworn statement that he never received the class notice

is true, he was on constructive notice of the pending class action and

proposed settlement pursuant to the published notice contained in

newspapers circulated throughout Pennsylvania. For these reasons.

Eric Maharg's request for enlargement of time within which to

exclude himself from the class (Doc. 174) is denied.

John Romano’s request (Doc. 119B) is denied as well.

Romano states that his attorney, Kenneth Behrend, posted his request

for exclusion on June 13, 1994, but that it was not postmarked until

June 14, 1994. However, according to a sworn admission made on

Romano’s behalf, this statement is untrue. On June 13, 1994, Mr.

Behrend attempted to exclude Mary Romano and not John Romano.

See Affidavit of Lorrie Wesolosky (Doc. 119A). The Claims

Administrator never received a request for exclusion from John

Romano. The Claims Administrator did receive from Mary Romano

a request postmarked on June 14, 1994. See 4 4(b) of Affidavit of

Linda Goldsmith (Doc. 191). Accordingly, because John Romano

never submitted a request for exclusion as he suggests, his request for

enlargement (Doc. 119B) is denied. Mary Romano, who made an

unsuccessful attempt to exclude herself, has not sought any relief.

Anissa and Ronald Coulter request an enlargement of time

within which to exclude themselves from the class (Doc. 174). On

March 24, 1994, the Coulters filed in Pennsylvania their own lawsuit

against Metlife. The Coulters do not suggest excusable neglect as a

basis for seeking permission to submit an untimely exclusion. Instead,

they argue that they should be excluded from the class because they

36a

manifested their intent to be excluded when they (1) filed their

Pennsylvania action on March 24, 1994, and (2) filed their motion for

intervention (Doc. 77) in this action on May 23, 1994. To the extent

that the Coulters suggest excusable neglect, they assert that they

should be relieved from the June 13, 1994, deadline because they

never received a Class notice.

As Metlife states in its response, “Of all the positions taken

by the various applicants, the least explicable is that of Ronald and

Anissa Coulter.” See p. 14 of Metlife response (Doc. 206). In their

motion for intervention (Doc. 77), the Coulters sought to exclude all

Pennsylvania residents from this action or to have their attorney

appointed as counsel for the Pennsylvania members of the settlement

class. As class members, the Coulters also filed a notice of intention

to appear and objections to the proposed settlement (Doc. 119).

“The pendency of an individual action does not excuse a class

member from filing a valid request for exclusion.” Jn re VMS Secs.

Litig., 1992 WL 203832, *3 (N.D. Ill. August 13, 1992).

Apparently, the Coulters made a tactical decision to avoid exclusion

for the purpose of objecting to the settlement and seeking significant

relief (i.e., exclusion of all Pennsylvania residents or appointment of

their attorney as class counsel). However, they cannot have it both

ways. The Coulters had a choice to opt out or participate. They

chose to participate. The parties were forced to respond to the

numerous papers that the Coulters filed in this action. A tactical

decision in litigation does not constitute excusable neglect. See

Slaughter v. Southern Talc Co., 919 F.2d 304, 307 (Sth Cir. 1990).

The Coulters will not be relieved from the consequence of their failed

plan. They received the benefits of retaining their class membership

(i.e., objecting to the settlement and participating in the fairness

hearing) and must now accept the settlement. See, e.g., In re VMS

Lid. Partnership Secs. Litig., 26 F.3d 50, 51 (7th Cir. 1994).

4. Unlike some of the other applicants, the Coulters do not deny the tactical

nature of their decision. For example, in Maharg’s request (Doc. 176), he states,

“The decision to request exclusion at this time was not made in bad faith, i.e., to

obtain any tactical advantage in the class action proceedings.”

37a

The Coulters’ assertion that they should be relieved from the

June 13, 1994, deadline because they did not receive the notice is

baseless. The Claims Administrator mailed a class notice to Ronald

Coulter on May 2, 1994. See Affidavit of G. Peter Buchband (Doc.

202). Moreover, based on the Coulters’ papers, they knew about the

proposed settlement and became intimately familiar with its terms as

early as May 5, 1994. See { 16 of the Coulters’ motion to intervene

(Doc. 77). Because the Coulters knew about the June 13, 1994,

deadline and had the ability to exclude themselves, their request (Doc.

174) is denied.

Finally, Jeanne Yokel requests an enlargement (Doc. 175)

because she was allegedly unsure as to whether she is a member of the

Class. In her unverified request, Yokel asserts that the confusion was

caused by her receiving a class notice even though she purchased an

odd premium/even face value whole life insurance policy. Yokel’s

attorney qualifies her claim as “churning” and unrelated to the claims

involved in this action.

Whether Yokel’s policy is odd premium/even face value or

even premium/odd face value is of little relevance in determining

whether she is a class member. That information was relevant to

identifying potential class members and determining whether a

policyholder should have received a class notice. Thus, Yokel had no

legitimate basis for being confused.

If Yokel was in doubt about her status, she should have erred

on the safe side and protected her interests by submitting a timely

request for exclusion.> The second sentence of the class notice states,

“The purpose of this Notice is to advise you concerning three

5. Alternatively, prior to the June 13, 1994, deadline, Yokel could have

sought a declaration that she is not a class member. At that time, she could have

obtained attorney Behrend’s assistance with the class notice and determined

whether declaratory relief was necessary. If Yokel sought his advise in August,

she could have done so in June, before the relevant deadline. See In re VMS

Partnership Secs. Litig., 26 F.3d 50, 51-2 (7th Cir. 1994). As mentioned earlier,

the class notice that Yokel received informed her that she could not only seek

assistance from her own attorney, but could contact class counsel or the Claims

Administrator for additional information.

38a

decisions you must make.” (emphasis added). The class notice clearly

informed Yokel that by failing to exclude herself she would be

relinquishing her rights to file an individual lawsuit against Metlife

and that she would be bound the adjudications in this action. Because

Yokel has not shown excusable neglect for her failure to submit a

timely request for exclusion, her request for enlargement (Doc. 175)

is denied.

Although each of the applicants’ requests is denied, any

applicants wishing to elect the cash refund or annuity options shall do

so by submitting to the Claims Administrator a properly completed

proof of claim form. The form shall be received by the Claims

Administrator on or before November 10, 1994.

ORDERED in Tampa, Florida, on October 25th, 1994.

__/s/ Steven D. Merryday_

STEVEN D. MERRYDAY

UNITED STATES DISTRICT JUDGE

39a

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF FLORIDA

TAMPA DIVISION

SHERRY HORTON, et al.,

Plaintiffs,

vs. CIV. NO. 93-1849-CIV-T-23A

METROPOLITAN LIFE

INSURANCE COMPANY,

Defendant.

ORDER

Before the Court is a petition (Doc. 178) filed on

September 21, 1994, by 26 individuals (the “petitioners”) seeking a

declaration that they are not members of the class. In the petition,

these alleged policyholders assert that they “were aware that life

insurance was part of the purchase they made from Metlife.” Because

they did not receive a class notice, the petitioners claim to be

uncertain as to whether they are considered class members.

Apparently, the petitioners wish to pursue individual claims against

Metlife. !

However, the petitioners fail to provide any affidavits or other

admissible evidence verifying their assertions. Further, even if they

purchased their life insurance policies during the relevant period, the

petitioners’ allegations are insufficient to find that they are beyond the

scope of the class definition. The settlement class consists of:

1. The petitioners appear to be trying to do indirectly what they are unable

to do directly. The deadline for opting out of the class has passed. Absent

sufficient cause, all persons who qualify as class members are bound by the terms

of the settlement agreement and this Sourt’s orders.

40a

all persons who purchased a Metlife whole life insurance

policy as a retirement and/or other savings plan or vehicle,

based in whole or in part on written materials that allegedly

did not fully disclose that these plans were life insurance

products, from (a) the Rick Urso & Associates sales office

(or its predecessor office) between January 1, 1988 and

October 31, 1993, or (b) any other sales office of Metlife

between January 1, 1990 and October 31, 1993.

See April 22, 1994, order (Doc. 48). Awareness that the product

included life insurance fails to equate with making the purchase

“based in whole or in part on written materials that allegedly did not

fully disclose that these plans were life insurance products.”

The Court is unwilling (1) to declare that a group of 20

individuals is not a part of the class or otherwise (2) to unravel in a

piecemeal fashion and without sufficient cause the court-approved

settlement. As mentioned in a separate order, one of the bargained-

for purposes of the $76 million settlement agreement is to litigate the

asserted claims in one forum and to bring finality to those claims.

Granting the petitioners’ request without a sufficient basis and forcing

Metlife to litigate elsewhere would not only frustrate the purposes of

the court-approved settlement and undermine the Court’s orders but

would be fundamentally unfair to Metlife, which is attempting to

resolve all pending claims.

Accordingly, the petition (Doc. 178) is DISMISSED

WITHOUT PREJUDICE. As Metlife suggests in its response

(Doc. 190), whether a policyholder is a class member is a fact-

specific inquiry that must be accomplished on a case-by-case basis.

Among the pertinent factual questions may be the date on which the

policyholder learned of this action and the pending settlement

agreement. Thus, any petitioner wishing to obtain a declaration of

their status in relation to this class action shall file on or before

November 17, 1994, an individual petition making the requisite

allegations supported by affidavits or other admissible evidence.

Pursuant to Rule 53, Federal Rules of Civil Procedure, and

consistent with the terms of the settlement agreement (Doc. 35) and

4la

the applicable order (Doc. 48), Peter Grilli is appointed as a special

master. Because of the large volume of petitions that may be filed,

exceptional conditions require this appointment. Any petitions or

other requests seeking either a declaration that an individual is not a

member of the class or some similar relief are REFERRED to the

special master to conduct any proceedings, including evidentiary

hearings, to prepare reports and recommendations. Each report and

recommendation shall contain findings of fact and conclusions of law.

Mr. Grilli shall be compensated for his time at $150 per hour and

reimbursed for all out-of-pocket expenses in connection with the per-

formance of his duties. Unless otherwise agreed to by the parties, the

fees and costs associated with each petition shall be shared equally

between the petitioner and Metlife. Mr. Grilli shall be paid the fees

and costs immediately upon his submission to the Court of the report

and recommendation.

In light of the allegations in the petitions, the possibility exists

that some, and possibly all, of the petitioners may qualify as class

members. As class members, prior to June 30, 1994, they could have

elected the options contained in the settlement agreement (i.e. , annuity

or cash refund). In its response (Doc. 190), Metlife offers the pe-

titioners the same settlement options that were available initially to

them even though the time for submitting a completed proof of claim

form has passed. Metlife is now bound to honor that offer. Any

petitioner wishing to elect the cash refund or annuity options shall do

so by submitting to the Claims Administrator a properly completed

Claim form. The form shall be received by the Claims Administrator

on or before November 10, 1994.

ORDERED in Tampa, Florida, on October 25th, 1994.

/s/ Stev y

STEVEN D. MERRYDAY

UNITED STATES DISTRICT JUDGE

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.