Professional Documents
Culture Documents
No. 09-1069
On Appeal From The United States District Court For The District Of Minnesota
(The Hon. Michael J. Davis) Civil No. 02-199, MDL No. 1431
a putative class may relitigate a final federal court judgment denying class
States District Court for the District of Minnesota (Davis, C.J.) denied certification
of a West Virginia economic loss class in the Baycol Products Liability Litigation
(MDL 1431) and entered summary judgment against the named plaintiff, George
putative McCollins class, then sought certification of the same class in West
Virginia state court. The District Court granted appellee Bayer Corporation’s
motion to enjoin Mr. Smith and Ms. Sperlazza from relitigating class certification.
subject to the jurisdiction of the District Court and bound by its final judgment
denying class certification. The District Court therefore had the authority under
the All Writs Act and the relitigation exception to the Anti-Injunction Act to enjoin
is appropriate.
i
Case: 09-1069 Page: 3 Date Filed: 04/03/2009 Entry ID: 3533707
ii
Case: 09-1069 Page: 4 Date Filed: 04/03/2009 Entry ID: 3533707
TABLE OF CONTENTS
Introduction ................................................................................................................1
I. Baycol.......................................................................................................7
V. The Injunction........................................................................................15
Standard of Review..................................................................................................18
Argument..................................................................................................................19
iii
Case: 09-1069 Page: 5 Date Filed: 04/03/2009 Entry ID: 3533707
III. The District Court Did Not Abuse Its Discretion In Issuing a
Permanent Injunction............................................................................44
Conclusion ...............................................................................................................49
iv
Case: 09-1069 Page: 6 Date Filed: 04/03/2009 Entry ID: 3533707
TABLE OF AUTHORITIES
Cases
Allen v. Stewart Title Guaranty Co., 06-cv-2426,
2007 WL 916859 (E.D. Pa. Mar. 20, 2007) ......................................................26
Alvarez v. May Dept. Stores Co., 143 Cal. App. 4th 1223
(Cal. Ct. App. 2006) ...........................................................................................26
Brown v. Ticor Title Ins., Co., 982 F.2d 386 (9th Cir. 1992) ............................37
Castano v. American Tobacco Co., 84 F.3d 734 (5th Cir. 1996) .................27,47
Chick Kam Choo v. Exxon Corp., 486 U.S. 140 (1988) ...............................20,36
DeBoer v. Mellon Mortgage Co., 64 F.3d 1171 (8th Cir. 1995) .......................33
Deposit Guaranty Nat’l Bank v. Roper, 445 U.S. 326 (1980) ...........................27
Dever v. Hentzen Coatings, Inc., 380 F.3d 1070 (8th Cir. 2004) ......................18
v
Case: 09-1069 Page: 7 Date Filed: 04/03/2009 Entry ID: 3533707
In re Baycol Prods. Liab. Litig., 218 F.R.D. 197 (D. Minn. 2003) ............ 7-8,10
In re Bayshore Trucks Sales, Inc., 471 F.3d 1233 (11th Cir. 2006) .............38,40
John Morrell & Co. v. Local Union 304A of United Food &
Commercial Workers, AFL-CIO, 913 F.2d 544 (8th Cir. 1990) .......................28
Jones v. St. Paul Cos., Inc., 495 F.3d 888 (8th Cir. 2007) ................................18
vi
Case: 09-1069 Page: 8 Date Filed: 04/03/2009 Entry ID: 3533707
Liles v. Del Campo, 350 F.3d 742 (8th Cir. 2003) ...........................................19
Parklane Hosiery Co., Inc. v. Shore, 439 U.S. 322 (1979) ...............................28
Paxton v. Union Nat’l Bank, 688 F.2d 552 (8th Cir. 1982) ........................ 32-33
Sanneman v. Chrysler Corp., 191 F.R.D. 441 (E.D. Pa. 2000) .........................42
Semtek Int’l Inc. v. Lockheed Martin Corp., 531 U.S. 497 (2001) ....................22
St. Jude Medical, Inc. v. Lifecare Int’l, Inc., 250 F.3d 587
(8th Cir. 2001) ....................................................................................................18
State v. Miller, 194 W. Va. 3, 459 S.E.2d 114 (W. Va. 1995) ..........................22
Taylor v. Sturgell, ___ U.S. ___, 128 S. Ct. 2161 (2008) ............................26,43
vii
Case: 09-1069 Page: 9 Date Filed: 04/03/2009 Entry ID: 3533707
Other Authority
viii
Case: 09-1069 Page: 10 Date Filed: 04/03/2009 Entry ID: 3533707
INTRODUCTION
This Court has long recognized that plaintiffs seeking class
certification “ought not to have unlimited bites at the apple” and that relitigation of
class certification “is wasteful and runs counter to the sound administration of
multi-district cases.” In re Piper Aircraft Distrib. Sys. Antitrust Litig., 551 F.2d
213, 219 (8th Cir. 1977). Nevertheless, appellants Keith Smith and Shirley
Sperlazza contend that plaintiffs have the right to relitigate class certification,
provided that different persons are named class representatives in each successive
case. Neither the Supreme Court nor this Court has so held, and this Court should
the market in 2001. The ensuing federal cases (ultimately involving approximately
economic loss class of West Virginia Baycol users asserting warranty and fraud
claims. The District Court held that individual issues predominated because class
members could not recover without proving individually that they were injured by
Baycol or did not benefit from the medicine. See Addendum to Brief of Appellants
1
Case: 09-1069 Page: 11 Date Filed: 04/03/2009 Entry ID: 3533707
(“Smith Add.”) at A01-A20 (McCollins v. Bayer Corp., No. 02-00199 (D. Minn.),
After the federal court McCollins judgment became final, Mr. Smith
and Ms. Sperlazza moved in West Virginia state court for certification of the same
West Virginia economic loss class, again asserting warranty and fraud claims. The
District Court granted Bayer’s motion to enjoin Mr. Smith and Ms. Sperlazza from
relitigating class certification, relying on the District Court’s powers under the All
Writs Act, 28 U.S.C. § 1651, and the relitigation exception to the Anti-Injunction
Act, 28 U.S.C. § 2283. See Smith Add. at A21-A38 (McCollins, Dec. 9, 2008
On appeal, Mr. Smith and Ms. Sperlazza contend that the relitigation
exception does not apply and, even if it does, the District Court abused its
First, Mr. Smith and Ms. Sperlazza contend that they are not
relitigating the same issue as in McCollins. They do not dispute that they seek
rejected in McCollins – that putative class members need not prove that they were
injured by, or did not benefit from, Baycol. However, Mr. Smith and Ms.
Sperlazza claim that their case is different because (a) it includes a common law
2
Case: 09-1069 Page: 12 Date Filed: 04/03/2009 Entry ID: 3533707
fraud claim and (b) the state court might exercise its discretion to certify a class
These arguments fail under the precedents of this Court, which hold:
(a) “The same cause of action framed in terms of a new legal theory is still the
same cause of action,” Canady v. Allstate Ins. Co., 282 F.3d 1005, 1015 (8th Cir.
2002); and (b) an “unfavorable class action determination [can] supply the basis
for a collateral estoppel bar.” In re Piper Aircraft, 551 F.2d at 220-21. Indeed, if
might exercise its discretion differently, no judgment in any class action would
Second, Mr. Smith and Ms. Sperlazza contend that they are not bound
by the McCollins denial of class certification and are not subject to the personal
jurisdiction of the District Court because they were not parties in McCollins and
many purposes” and are bound by a decision denying class certification when their
interests are adequately represented with respect to the certification decision. See
In re Bridgestone/Firestone, Inc. Tires Prod. Liab. Litig., 333 F.3d 763, 768-69
(7th Cir. 2003). Mr. McCollins adequately represented the interests of Mr. Smith
and Ms. Sperlazza in seeking class certification. Indeed, as shown below, his
3
Case: 09-1069 Page: 13 Date Filed: 04/03/2009 Entry ID: 3533707
interests and appellants’ are completely aligned. See Amchem Prods., Inc. v.
Windsor, 521 U.S. 591, 625-26 (1997). Accordingly, Mr. Smith and Ms. Sperlazza
depend on context. See Putnam v. Keller, 332 F.3d 541, 546-47 (8th Cir. 2003).
claim for money damages. See Phillips Petroleum Co. v. Shutts, 472 U.S. 797,
811-12 (1985). However, the merits of appellants’ claims are not at issue here –
only their interest in securing class certification. That interest is protected through
Third, Mr. Smith and Ms. Sperlazza argue that no injunction should
have issued because in their view the equities favor plaintiffs, who can litigate low-
value claims only on a classwide basis. The District Court considered the value of
economic loss class. The District Court did not abuse its discretion in holding that
Bayer, having fought and won the battle over class certification, should not be
required to fight that battle again. Accord Canady, 282 F.3d at 1018.
4
Case: 09-1069 Page: 14 Date Filed: 04/03/2009 Entry ID: 3533707
putative class has been adequately represented, the requirements of due process
and the relitigation exception are met and absent class members may be enjoined
from asking another court to certify the same class denied certification in a final
federal court judgment. Accordingly, this Court should affirm the order of the
District Court enjoining Mr. Smith and Ms. Sperlazza from relitigating
matter jurisdiction arising from appellants’ brief. See Brief of Appellants (“Smith
Br.”) at 8 (first asserting “that the United States District Court for the District of
Minnesota lacked subject-matter jurisdiction over them and the class they seek to
represent,” but then stating that “this factor is distinct from whether the District
Court had the authority to issue an order enjoining proceedings in a state court
action”).
appellants’ state court case, Smith v. Bayer Corp., No. 01-C-191 (Brooke Co.
W. Va.). Rather, the District Court issued its injunction in McCollins v. Bayer
5
Case: 09-1069 Page: 15 Date Filed: 04/03/2009 Entry ID: 3533707
Corp., No. 02-cv-00199 (D. Minn.), 1 to prevent relitigation of the District Court’s
that the District Court had subject matter jurisdiction over McCollins or that the
District Court had the authority to protect its judgment in McCollins. See Smith
Br. at 8.
demonstrated below, they are subject to that jurisdiction. See infra at Argument,
Section II.C.
Sperlazza are seeking to relitigate in state court certification of the identical West
Virginia economic loss class to which the District Court denied certification in
McCollins? See 28 U.S.C. § 2283; Canady v. Allstate Ins. Co., 282 F.3d 1005 (8th
Cir. 2002); In re Piper Aircraft Distrib. Sys. Antitrust Litig., 551 F.2d 213 (8th Cir.
1977); In re Bridgestone/Firestone, Inc. Tires Prod. Liab. Litig., 333 F.3d 763 (7th
Cir. 2003).
1
The McCollins action was originally brought by Michael Black, Peggy Ann
Mays, and George McCollins as Black v. Bayer Corp. Mr. Black and Ms. Mays
were not parties at the time the District Court finally decided the issues relevant to
this appeal. See infra at pp. 11-12.
6
Case: 09-1069 Page: 16 Date Filed: 04/03/2009 Entry ID: 3533707
McCollins, Mr. Smith and Ms. Sperlazza are subject to the personal jurisdiction of
the District Court and therefore bound by that denial of certification? See Amchem
Tires Prod. Liab. Litig., 333 F.3d 763 (7th Cir. 2003).
3. Having concluded that it had authority under the All Writs Act, 28
U.S.C. § 1651, and the relitigation exception to the Anti-Injunction Act, 28 U.S.C.
§ 2283, to enjoin Mr. Smith and Ms. Sperlazza from relitigating class certification
in state court, did the District Court properly exercise its discretion by issuing an
injunction? See 28 U.S.C. § 1651; Canady v. Allstate Ins. Co., 282 F.3d 1005 (8th
Cir. 2002); In re Piper Aircraft Distrib. Sys. Antitrust Litig., 551 F.2d 213 (8th Cir.
1977); In re Bridgestone/Firestone, Inc. Tires Prod. Liab. Litig., 333 F.3d 763 (7th
Cir. 2003).
I. Baycol
that Bayer AG manufactured and Bayer Corporation distributed under the approval
of the United States Food and Drug Administration (“FDA”) from 1997 until
August 8, 2001. See In re Baycol Prods. Liab. Litig., 218 F.R.D. 197, 201 (D.
7
Case: 09-1069 Page: 17 Date Filed: 04/03/2009 Entry ID: 3533707
Like all other statins, Baycol has been associated with muscle aches
and pains, as well as more serious side effects, such as rhabdomyolysis (a severe
breakdown of muscle tissue where the substances released into the bloodstream
may on occasion overwhelm the kidneys). See id. From Baycol’s first release,
every FDA-approved label and package insert contained a warning about these and
other side effects, and also warned about the risk of using another class of lipid-
lowering drugs (called “fibrates”) concurrently with Baycol. See, e.g., July 2000
warned that concurrent use of Baycol and gemfibrozil, one such fibrate, was
http://www.fda.gov/medwatch/SAFETY/2001/Baycol_deardoc2.pdf. In view of
these continued reports, on August 8, 2001, Bayer voluntarily decided, with the
approval of the FDA, to withdraw Baycol from the market. See id.
8
Case: 09-1069 Page: 18 Date Filed: 04/03/2009 Entry ID: 3533707
proceedings. See In re Baycol Prods. Liab. Litig., No. 1431, 2001 WL 34134820,
From the first year of this litigation, the District Court has supervised
a settlement program that has paid $1.17 billion to 3,135 claimants who suffered
rhabdomyolysis, the specific side effect that led to the withdrawal of Baycol from
BA393-BA394 (In re Baycol Prods. Litig., Pretrial Order (“PTO”) 51); see also id.
assure that federal and state court rhabdomyolysis cases were being settled fairly
2
The District Court has worked actively and cooperatively with state courts to
coordinate federal and state Baycol litigation – through a joint conference,
correspondence with other judges, and creation of a coordinated federal/state
program for depositions of witnesses overseas. See, e.g., Bayer App. at BA395-
BA401 (PTO 63).
9
Case: 09-1069 Page: 19 Date Filed: 04/03/2009 Entry ID: 3533707
other claims, including cases alleging injuries other than rhabdomyolysis and cases
seeking economic recovery for plaintiffs who benefited from taking Baycol.
More than 22,500 plaintiffs have had Baycol cases pending in federal
court over the last eight years. See id. at BA428-BA434. 3 The District Court has
discovery (see, e.g., id. at BA340-BA392, BA406-BA424 (PTOs 4, 10, 12, 81 &
85)), or had their cases dismissed for failure to produce short-form expert reports
to support their claims that Baycol caused their alleged injuries (see, e.g., id. at
BA435-BA445, BA456-BA465 (PTOs 114 & 131); In re Baycol Prods. Litig., 321
F. Supp. 2d 1118, 1124 (D. Minn. 2004)). The District Court has ruled on
motions, and motions for summary judgment. See generally In re Baycol, 218
F.R.D. 197 (deciding petition for various nationwide classes); In re Baycol Prods.
Liab. Litig., 532 F. Supp. 2d 1029 (D. Minn. 2007) (deciding generic Daubert
3
In addition, Bayer has defended the claims of approximately 17,500 former
Baycol users in state court. See, e.g., Bayer App. at BA428-BA434, BA479-
BA484 (citing the volume of state court claims). The six Baycol cases tried to
juries in state court have produced defense verdicts. Today, the claims of 240
plaintiffs remain pending in state court.
10
Case: 09-1069 Page: 20 Date Filed: 04/03/2009 Entry ID: 3533707
federal court.
market, Michael Black, Peggy Ann Mays, and George McCollins filed a putative
class action complaint in the Circuit Court of Cabell County, West Virginia. See
Black v. Bayer Corp, et al., No. 01-c-0725 (Cir. Ct. Cabell County, W.Va.)). Their
action was filed on behalf of a consumer class of “[a]ll persons in West Virginia
who purchased the drug cerivastatin under the brand name ‘Baycol’ between
February 1998 and August 8, 2001, or their estates, administrators or other legal
Complaint, ¶ 34). Plaintiffs sought recovery for economic losses allegedly caused
Credit and Protection Act (“WVCCPA”), W. Va. Code § 46A-6-101. See id. at
putative class members and sought only the recovery of alleged economic loss.
11
Case: 09-1069 Page: 21 Date Filed: 04/03/2009 Entry ID: 3533707
their complaint twice, but continued to seek only alleged economic losses on
behalf of a putative class of West Virginia Baycol purchasers. See Smith App. at
Complaint). One putative class representative, Peggy Ann Mays, was omitted
from the amended complaints and the claims of another, Michael Black, were
dismissed with prejudice, leaving George McCollins as the lone remaining putative
class representative. See id. (omitting Peggy Ann Mays); Bayer App. at BA116-
injury from Baycol and that the medicine reduced his cholesterol. See Smith App.
McCollins moved the District Court to recommend remand of the case. See Bayer
App. at BA160-BA164. Bayer opposed remand and moved to (a) deny class
certification and (b) enter summary judgment against Mr. McCollins on his
After full briefing, on August 25, 2008 the District Court denied
12
Case: 09-1069 Page: 22 Date Filed: 04/03/2009 Entry ID: 3533707
Aug. 25, 2008 Memorandum of Law & Order). Specifically, the District Court
held that, in order to prove liability for economic loss claims under West Virginia
Baycol.” Id. at A12. Because each member of the putative class would have to
present individual evidence on his or her medical history, alleged injuries, and
claims, the District Court concluded that no genuine issue of material fact
supported his claim that he had not received the benefit of his Baycol purchase,
Neither Mr. McCollins nor any class member appealed the judgment
Keith Smith, Shirley Sperlazza, and Nancy Gandee filed their class
Corp., et al., No. 01-C-191 (Cir. Ct. Brooke County, W. Va.)). Bayer could not
remove the case because two local defendants were sued in connection with Ms.
13
Case: 09-1069 Page: 23 Date Filed: 04/03/2009 Entry ID: 3533707
Gandee’s claim. Although the local defendants were dismissed when Ms.
Gandee’s claim was settled, the dismissals came too late to allow removal. 4
Virginia residents and others who have ingested Cerivastatin, sold under the trade
name ‘Baycol’ in West Virginia.” Id. at SA097 (Smith, Complaint, ¶ 3). They
asserted personal injury, medical monitoring, and economic loss claims on behalf
of the putative class. See id. at SA103-SA111. During class discovery, the doctor
who treated Mr. Smith and Ms. Sperlazza testified that they suffered no side effects
from Baycol and that the medicine reduced their cholesterol. See id. at SA223-
On September 30, 2008, seven years after the Smith case was filed and
five days after the District Court’s ruling in McCollins became final, Mr. Smith
and Ms. Sperlazza filed a motion seeking certification of an economic loss class
“all West Virginia residents who purchased the drug Baycol in West Virginia . . .
with respect to their consumer protection act claims as set forth in the complaint.”
4
The forum defendants were dismissed after Ms. Gandee settled her claims in July
2003, well after the one-year period for removal. See 28 U.S.C. § 1446. Bayer
was not able to remove the action under the Class Action Fairness Act of 2005,
since the action was filed and the parties became diverse before the effective date
of the Act. See Pub. L. No. 109-2, 119 Stat. 4, at § 9; see also 28 U.S.C. § 1332,
Notes (incorporating Section 9 of the Class Action Fairness Act).
14
Case: 09-1069 Page: 24 Date Filed: 04/03/2009 Entry ID: 3533707
Id. at SA122. Counsel for Mr. Smith and Ms. Sperlazza explained that they would
pursue claims for breach of warranty, common law fraud, and violation of the
V. The Injunction
Bayer then moved in McCollins in the District of Minnesota to enjoin
Mr. Smith and Ms. Sperlazza from relitigating certification of a West Virginia
economic loss class. See Smith App. at SA021-SA292. After a full briefing and
those Mr. Smith and Ms. Sperlazza sought to have certified in West
• Appellants were absent members of the putative McCollins class. See id. at
A35.
• The McCollins denial of class certification was final and conclusive. See id.
at A28-A31.
15
Case: 09-1069 Page: 25 Date Filed: 04/03/2009 Entry ID: 3533707
personam to the denial of class certification in the District Court. See id. at
A32-A36.
Based on these conclusions, the District Court held that the relitigation exception
to the Anti-Injunction Act applied (id. at A24-A36) and the balance of equities
favored injunctive relief (id. at A36-A38). Pursuant to its authority under the All
Writs Act, the District Court issued a narrowly tailored injunction barring
Baycol purchasers” in the Smith case. Id. at A36-A38. Nothing in the District
Court’s order prevents Mr. Smith and Ms. Sperlazza from pursuing their individual
a defendant loses a class certification motion, that defendant is faced with litigating
plaintiffs can try their luck in another court; all that is required is a different named
plaintiff. The District Court properly held that plaintiffs are not entitled to game
16
Case: 09-1069 Page: 26 Date Filed: 04/03/2009 Entry ID: 3533707
the system this way. None of appellants’ arguments provide a basis for vacating
federal court may issue an injunction against relitigation in a state court. The
question for this appeal is whether the District Court’s narrow injunction barring
already denied certification by the federal MDL court falls within the scope of the
of the same West Virginia economic loss class, for the same relief, on the same
Mr. Smith and Ms. Sperlazza’s interests were adequately represented the first time
certification of that class was litigated. Accordingly, they are bound in personam
III. The District Court properly exercised its discretion in enjoining Mr.
economic loss class. The fact that economic loss claims have limited value does
17
Case: 09-1069 Page: 27 Date Filed: 04/03/2009 Entry ID: 3533707
McCollins is entitled to collateral estoppel effect, and the District Court correctly
determined that the relitigation exception to the Anti-Injunction Act and the
authority vested by the All Writs Act permitted the District Court to protect that
judgment. This Court should therefore affirm the District Court’s order enjoining
Mr. Smith and Ms. Sperlazza from relitigating in state court the same West
Virginia economic loss class that the District Court denied certification in
McCollins.
STANDARD OF REVIEW
This Court reviews de novo the District Court’s finding that it had
personal jurisdiction over appellants. See, e.g., Dever v. Hentzen Coatings, Inc.,
380 F.3d 1070, 1072 (8th Cir. 2004) (“We review personal jurisdiction questions
de novo”); St. Jude Medical, Inc. v. Lifecare Int’l, Inc., 250 F.3d 587, 591 (8th Cir.
2001) (same). Also subject to de novo review is the District Court’s determination
that the relitigation exception to the Anti-Injunction Act applies to this case. See,
e.g., Jones v. St. Paul Cos., Inc., 495 F.3d 888, 890 (8th Cir. 2007) (“We review de
novo the issue whether the Anti-Injunction Act’s relitigation exception applies”);
In re BankAmerica Corp. Securities Litig., 263 F.3d 795, 800 (8th Cir. 2001).
18
Case: 09-1069 Page: 28 Date Filed: 04/03/2009 Entry ID: 3533707
enjoining Mr. Smith and Ms. Sperlazza from seeking certification of a West
Virginia economic loss class. See, e.g., Liles v. Del Campo, 350 F.3d 742, 746
(8th Cir. 2003) (“We review an order enjoining related litigation for an abuse of
discretion”).
ARGUMENT
federal and state courts, and that balance is codified through the interplay of the All
Writs and Anti-Injunction Acts. The All Writs Act empowers a federal court to
protect the collateral estoppel effects of the court’s judgments. Canady, 283 F.3d
at 1018.
19
Case: 09-1069 Page: 29 Date Filed: 04/03/2009 Entry ID: 3533707
court to prevent state litigation of an issue that previously was presented to and
judicata and collateral estoppel.” See Chick Kam Choo v. Exxon Corp., 486 U.S.
140, 147 (1988); 5 see also Rivet v. Regions Bank of Louisiana, 522 U.S. 470, 478
n.3 (1998) (“We note also that under the relitigation exception to the Anti-
5
Appellants suggest that Chick Cam Choo restricted the scope of the relitigation
exception to federal judgments on federal questions. See Smith Br. at 17-18.
Chick Kam Choo stated only that the purpose of the Anti-Injunction Act exceptions
is to “ensure the effectiveness and supremacy of federal law.” 486 U.S. at 146.
Nothing in the opinion – nor in the language of the Anti-Injunction Act – supports
a distinction between federal court judgments based on federal law and federal
court judgments based on state law.
Appellants also assert that “the mere existence of a parallel lawsuit in state court”
does not support issuance of an injunction. Smith Br. at 19. Bayer agrees. The
injunction here issued only after the District Court entered a final judgment and
after appellants filed a motion in state court to relitigate an issue “presented to and
decided by the federal court.” Chick Kam Choo, 486 U.S. at 147.
20
Case: 09-1069 Page: 30 Date Filed: 04/03/2009 Entry ID: 3533707
and comity” support the protection of federal court judgments. Indeed, more
enacting the Class Action Fairness Act (CAFA), which allows removal of cases
like this one and thereby virtually eliminates the potential for plaintiffs to attempt
state court relitigation of federal decisions denying class certification. See Class
Appellants’ state court lawsuit was filed before the effective date of
CAFA and could not be removed due to the presence of non-diverse defendants
(no longer parties to the case). See supra at 14 n.4. Given the enactment of
question here is only whether the narrow injunction issued by the District Court
falls within the scope of the relitigation exception. As demonstrated below, the
District Court properly concluded that the injunction meets that test.
21
Case: 09-1069 Page: 31 Date Filed: 04/03/2009 Entry ID: 3533707
282 F.3d at 1017-18; In re Piper Aircraft, 551 F.2d at 220-21. Collateral estoppel
(3) the party against whom the doctrine is invoked was a party or in
privity with a party to a prior action; and
(4) the party against whom the doctrine is raised had a full and fair
opportunity to litigate the issue in the prior action.
State v. Miller, 194 W. Va. 3, 9, 459 S.E.2d 114, 120 (W. Va. 1995). 6 As the
meets each of these conditions. See Smith Add. at A21-A38 (McCollins, Dec. 9,
6
“[F]ederal common law governs the claim-preclusive effect of a dismissal by a
federal court sitting in diversity.” Semtek Int’l Inc. v. Lockheed Martin Corp., 531
U.S. 497, 508 (2001). “[A]s the federally prescribed rule of decision,” the
preclusion law of the relevant state applies unless that state’s law is incompatible
with federal principles; in that case, federal collateral estoppel principles control.
See id at 509. See also Sensormatic Sec. Corp. v. Sensormatic Elec. Corp., 273
Fed. Appx. 256, 261 (4th Cir. 2008).
22
Case: 09-1069 Page: 32 Date Filed: 04/03/2009 Entry ID: 3533707
identity of issues. The issue that Mr. Smith and Ms. Sperlazza seek to relitigate in
West Virginia state court – certification of a West Virginia economic loss class – is
West Virginia who purchased the drug cerivastatin under the brand
Id. at SA097. Mr. Smith and Ms. Sperlazza do not contest the identity
of classes.
behalf of the putative class. Id. at SA089-SA094. Mr. Smith and Ms.
23
Case: 09-1069 Page: 33 Date Filed: 04/03/2009 Entry ID: 3533707
Sperlazza have alleged the identical claims, plus common law fraud.
contend that the presence of the common law fraud claim destroys
identity of issues. See Smith Br. at 21-22. This Court already has
action framed in terms of a new legal theory is still the same cause of
Mr. McCollins, Mr. Smith and Ms. Sperlazza all assert claims arising
Complaint).
same. Appellants contend that it does not matter under West Virginia
24
Case: 09-1069 Page: 34 Date Filed: 04/03/2009 Entry ID: 3533707
estoppel does not apply to a decision denying class certification because another
court might exercise its discretion differently. See Smith Br. at 22-28. This Court
already has ruled to the contrary. In In re Piper Aircraft, the Court explicitly stated
that “unfavorable class action determination [can] supply the basis for a collateral
estoppel bar.” In re Piper Aircraft, 551 F.2d at 220-21. In Canady, this Court
applied collateral estoppel to bar subsequent efforts to certify a putative class for
which certification had been denied previously. See Canady, 282 F.3d at 1017.
in state courts after certification of that class was denied in federal court. See In re
District Court for the Eastern District of Virginia held that a defendant was
25
Case: 09-1069 Page: 35 Date Filed: 04/03/2009 Entry ID: 3533707
punitive damages after certification of the same class was blocked by the Ninth
Circuit in related litigation. See In re Dalkon Shield Punitive Damages Litig., 613
F. Supp. 1112, 1115-19 (E.D. Va. 1985); accord Alvarez v. May Dept. Stores Co.,
143 Cal. App. 4th 1223, 1240 (Cal. Ct. App. 2006) (also applying collateral
support of their argument. See Smith Br. at 22-25 (citing J.R. Clearwater Inc. v.
Ashland Chem. Co., 93 F.3d 176 (5th Cir. 1996) (relitigation provision does not
General Motors Corp. Pick-Up Truck Fuel Tank Prod. Liab. Litig., 134 F.3d 133
(3d Cir. 1998) (same, following Clearwater)). 8 Those opinions are not persuasive
7
California courts are divided on this issue. In Johnson v. GlaxoSmithKline, Inc.,
166 Cal. App. 4th 1497 (Cal. Ct. App. 2008), a different division of the same
intermediate appellate court held that enjoining relitigation of class claims would
be inconsistent with the United States Supreme Court’s decision in Taylor v.
Sturgell, ___ U.S. ___, 128 S. Ct. 2161 (2008). The Johnson decision is wrong,
because Taylor explicitly carved out class actions from its ban on virtual
representation. See infra at pp. 43-44.
8
Appellants also cite Allen v. Stewart Title Guaranty Co., 06-cv-2426, 2007 WL
916859 (E.D. Pa. Mar. 20, 2007) (unpublished), a District Court decision from the
Third Circuit, which simply follows In re General Motors and Clearwater.
26
Case: 09-1069 Page: 36 Date Filed: 04/03/2009 Entry ID: 3533707
Clearwater, 93 F.3d at 180; In re General Motors, 134 F.3d at 146. That ignores
at 768; Castano v. American Tobacco Co., 84 F.3d 734, 746 (5th Cir. 1996); see
also Deposit Guaranty Nat’l Bank v. Roper, 445 U.S. 326, 336 (1980) (“denial of
inquiry under collateral estoppel law – with identity of possible outcome. Issue
preclusion does not depend on how a prior judgment came out or whether
issue has been fully litigated. See Starker v. U.S., 602 F.2d 1341, 1347 n.3 (9th
Cir. 1979) (“The correctness of the ruling in [the prior action] is irrelevant for
collateral estoppel purposes. ‘(A) judgment, not set aside on appeal or otherwise,
is equally effective as an estoppel upon the points decided, whether the decision be
right or wrong’”) (internal citations omitted); Rouse v. II-VI Inc., No. 2:06-cv-566,
2008 WL 2914796, *11 n.9 (W.D. Pa. Jul. 24, 2008) (unpublished) (“The point is
27
Case: 09-1069 Page: 37 Date Filed: 04/03/2009 Entry ID: 3533707
that the correctness (or incorrectness) of that [prior] decision is irrelevant to the
denying, class certification. Absent class members who ordinarily are bound by a
final class judgment (Goff v. Menke, 672 F.2d 702, 704 (8th Cir. 1982)), would be
able to evade res judicata and collateral estoppel by asserting that the class would
never have been certified if it had been brought originally in a different forum.
apply to the facts of this case because Mr. Smith and Ms. Sperlazza are not simply
asking the West Virginia court to de facto overrule a decision of law inextricably
intertwined with the denial of class certification in McCollins, the District Court’s
holding that “individual issues of fact predominate with respect to whether Baycol
benefitted or harmed any particular person.” Smith Add. at A12. Appellants are
9
See Parklane Hosiery Co., Inc. v. Shore, 439 U.S. 322, 327 n.5 (1979) (“Under
the doctrine of collateral estoppel . . . the judgment in the prior suit precludes
relitigation of issues actually litigated and necessary to the outcome of the first
action”) (emphasis added); John Morrell & Co. v. Local Union 304A of United
Food & Commercial Workers, AFL-CIO, 913 F.2d 544, 562 n.14 (8th Cir. 1990)
(same, quoting Parklane Hosiery).
28
Case: 09-1069 Page: 38 Date Filed: 04/03/2009 Entry ID: 3533707
using Smith as a vehicle to collaterally attack that judgment, arguing in their state
court certification papers that, “with respect to liability, there are no individual
issues.” Smith App. at SA140. None of the cases cited by Mr. Smith and Ms.
Sperlazza stands for the proposition that appellants may shop a final judgment
a different result. To the contrary, this Court has held that litigants “may not []
recycle the same claims and issues in different courts, hoping to achieve the result
support of their view that a class would be certified by a West Virginia court. See
Smith Br. at 26-28 (citing In re W. Va. Rezulin Litig., 214 W. Va. 52, 585 S.E.2d
economic loss class on a finding that individual issues of damages did not
predominate over common issues of fact. See Smith Add. at A26-A27; accord In
10
Mr. Smith and Ms. Sperlazza also cite Rezulin for the proposition that a West
Virginia court applying West Virginia Rule 23 is not bound by decisions applying
Federal Rule 23. See Smith Br. at 27 (quoting Rezulin statement that a federal case
may be persuasive but is not controlling). See also id. at 19 (“Decisions of federal
courts applying state substantive law are not binding authority on any state court
applying the same state law to the same or similar set of facts”). However, the
issue in this case is not whether the West Virginia state court is bound by the
District Court’s decision in McCollins, but rather whether appellants are bound by
that decision.
29
Case: 09-1069 Page: 39 Date Filed: 04/03/2009 Entry ID: 3533707
elements of proof for economic loss claims under West Virginia law – “whether
the individual person benefitted from or was injured by Baycol” (Smith Add. at
In sum, appellants cannot avoid the fact that they are seeking
certification of the same class that was denied certification in McCollins. Because
the issues presented are identical, the first requirement for application of the
the relitigation exception: finality. As this Court has held, an order denying class
certification becomes final for the purposes of collateral estoppel when a final
judgment has issued. See Canady, 282 F.3d at 1016-17. The McCollins judgment
is final; the District Court entered summary judgment against the claims of the sole
remaining plaintiff and no appeal was taken. See Smith Add. at A01-A20.
11
Counsel for appellants claim that, because they were “lead counsel in In re W.
Va. Rezulin Litigation” the Court should trust that “the trial court held in that case
that individual issues predominated over common issues on all questions of
liability, causation, and damages.” Smith Br. at 27 n.6. Counsel cannot rewrite the
Rezulin decision of the West Virginia Supreme Court of Appeals through this
tactic. The opinion supports only the conclusion that West Virginia’s highest court
rejected the claim that individual issues of damages predominated over common
issues of fact with respect to the economic loss claims asserted in that case.
30
Case: 09-1069 Page: 40 Date Filed: 04/03/2009 Entry ID: 3533707
that the estopped litigant must be a party or in privity with a party in the underlying
case and have had a full, fair opportunity to litigate the issue in question. See
supra at 22. Mr. Smith and Ms. Sperlazza contend that they are not parties, are not
bound by the McCollins judgment, and therefore are not subject to the personal
McCollins decision binds Mr. Smith and Ms. Sperlazza in any manner with respect
to their individual claims. Appellants are free to pursue those claims in their state
court action. See Canady, 282 F.3d at 1018. With regard to the question of class
12
Appellants suggest that class certification decisions are not entitled to preclusive
effect because they are not final judgments. See Smith Br. at 22 n.3 (“Generally
speaking, an order refusing to certify, or decertify, a class action is not a final
judgment on the merits sufficient to satisfy res judicata principles underlying the
relitigation exception to the Anti-Injunction Act and may not be appealed as
such.”). This case does not, however, present the question of whether or when an
interlocutory class certification judgment may have preclusive effect. Appellants
concede that the District Court entered a final judgment in McCollins. See id.
(“The District Court’s decision denying class certification in McCollins . . . became
appealable following the entry of final judgment”).
31
Case: 09-1069 Page: 41 Date Filed: 04/03/2009 Entry ID: 3533707
“binding in personam with respect to unnamed class members” when those class
could not have asked for a named plaintiff to more closely represent their position
entitled to relitigate class certification seriatim, because class members are not
bound by a decision denying class certification. 333 F.3d at 767. The Seventh
Circuit rejected plaintiffs’ claim that “the legal system entitles them to the benefit
of this heads-I-win, tails-you-lose situation.” Id. Instead, the court concluded that
absent class members are bound by a decision denying class certification where
when the putative class representative (a) is part of the class she or he seeks to
represent, (b) experienced the same alleged injury, and (c) has the same interests as
absent class members. Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 625-26
(1997); see also Paxton v. Union Nat’l Bank, 688 F.2d 552, 562-63 (8th Cir. 1982)
32
Case: 09-1069 Page: 42 Date Filed: 04/03/2009 Entry ID: 3533707
(same). 13 Here, the record fully supports the District Court’s determination that
Mr. McCollins “adequately represented” the absent members of his putative class
First, Mr. McCollins, Mr. Smith, and Ms. Sperlazza were members of
the putative McCollins class. The proposed economic loss class in McCollins was
comprised of “all persons in West Virginia who purchased the drug cerivastatin
under the brand name ‘Baycol’ between February 1998 and August 8, 2001, or
Smith App. at SA087. Mr. McCollins, Mr. Smith, and Ms. Sperlazza claim to have
been West Virginians who purchased Baycol within the period defined in the
McCollins class. Id. (Mr. McCollins); id. at SA111-SA114 (Mr. Smith and Ms.
Sperlazza). Indeed, Mr. Smith and Ms. Sperlazza seek to represent the same class
of Baycol purchasers in their putative class action in West Virginia state court.
Compare SA097 (Smith class definition) with SA087 (McCollins class definition);
13
See also Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 808 (1985) (“The absent
parties 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.”); DeBoer v. Mellon Mortgage Co., 64 F.3d 1171, 1175 (8th Cir.
1995) (adequacy of representation where named representative and class counsel
had no conflicts with absent class members and “vigorously pursued” the issue in
dispute).
33
Case: 09-1069 Page: 43 Date Filed: 04/03/2009 Entry ID: 3533707
Second, Mr. McCollins sought recovery for the same alleged injury –
economic loss allegedly caused by Bayer’s misconduct – for which Mr. Smith and
Ms. Sperlazza now seek recovery on behalf of West Virginia Baycol purchasers in
a West Virginia state court. See supra at 23-24. Moreover, fact discovery has
demonstrated that all three took the same dosage of Baycol (0.4mg), that all three
benefited from Baycol, and that none of the three has a claim for personal injury
Third, Mr. McCollins, Mr. Smith, and Ms. Sperlazza’s interests are
perfectly aligned. The claims of all three rest on the singular premise that the
11-15, 24-25. Indeed, the arguments Mr. McCollins presented the District Court in
seeking class certification are echoed in those presented by Mr. Smith and Ms.
McCollins’ petition for class certification, like Mr. Smith and Ms. Sperlazza’s
petition in West Virginia, was that plaintiffs need not individually prove injury and
causation in order to recover under West Virginia law, and therefore individual
34
Case: 09-1069 Page: 44 Date Filed: 04/03/2009 Entry ID: 3533707
issues of causation and injury do not predominate over common issues regarding
adequacy of representation. Further, the District Court found that “counsel for the
representation – was sufficient to protect Mr. Smith’s and Ms. Sperlazza’s due
process rights and bind them to the McCollins denial of class certification.
complain that (a) the District Court did not make an express finding of adequacy in
the original opinion denying class certification in McCollins, and (b) Mr.
McCollins did not move to reconsider or appeal the denial of class certification.
of substantive law unrelated to the adequacy of the representation. See Smith Add.
35
Case: 09-1069 Page: 45 Date Filed: 04/03/2009 Entry ID: 3533707
litigated in connection with Bayer’s motion for a permanent injunction. See Smith
McCollins’ adequacy in injunction briefing). The record fully supports the District
members and that class counsel vigorously pursued certification of the class
claims. Smith Add. at A35; see also supra at Argument, Section II.A.
486 U.S. at 148, but they mischaracterize the Supreme Court’s decision. There,
the Court required “that the claims or issues that the federal injunction insulates
from litigation in state court proceedings actually have been decided by the federal
court” for the relitigation exception to apply. Here, the issue insulated by the
was decided in the McCollins case. See Smith Add. at A01-A20. The District
Court did not engage in any post hoc judgments as to the propriety of class
certification.
Moreover, the fact that Mr. McCollins did not move to reconsider or
appeal the District Court’s denial of class certification did not render him
inadequate. A “decision not to appeal this Court’s previous order denying class
certification does not, in and of itself, render his representation inadequate.” Smith
36
Case: 09-1069 Page: 46 Date Filed: 04/03/2009 Entry ID: 3533707
Add. at A35 (citing Brown v. Ticor Title Ins., Co., 982 F.2d 386, 390-91 (9th Cir.
prosecute or defend the action with due diligence and reasonable prudence.”
Brown, 982 F.2d at 390-91 (internal citation omitted). Appellants have not
certification, nor have they alleged that he failed to diligently prosecute the case.
Nor can appellants make any such allegations, since their recent motion for class
certification in Smith makes the same arguments Mr. McCollins pressed in his
Smith and Ms. Sperlazza in seeking certification of a West Virginia economic loss
37
Case: 09-1069 Page: 47 Date Filed: 04/03/2009 Entry ID: 3533707
Mr. Smith and Ms. Sperlazza assert that, as absent class members,
they are nonparties and “strangers” to the McCollins class certification decision
and therefore cannot be bound by it. See Smith Br. at 28-33 (citing In re Bayshore
Trucks Sales, Inc., 471 F.3d 1233, 1245 (11th Cir. 2006), and In re General
Motors, 134 F.3d at 141, discussed above). However, the Supreme Court has
rejected this rigid approach. Most recently, in Devlin v. Scardelletti, 536 U.S. 1, 7-
10 (2002), the Supreme Court held that, because absent class members have an
interest in class-related decisions, they may appeal those decisions without first
intervening to obtain “party” status. The Supreme Court explained that context
Id. at 9-10 (emphasis added). This pragmatic approach also allows absent class
members to benefit from the tolling of limitations periods during the pendency of
class actions, including the period before any ruling on class certification, even
though they are not nominal “parties.” See American Pipe & Construction Co. v.
Utah, 414 U.S. 538, 553-54 (1974); see also Redmond v. Moody’s Investor
38
Case: 09-1069 Page: 48 Date Filed: 04/03/2009 Entry ID: 3533707
permissible). 14
members can be bound by a decision denying class certification, when they have
been adequately represented, follows this well-established line of cases. 333 F.3d
14
See also 5 Newberg on Class Actions § 16.01 (4th Ed.) (citing and cross-
referencing citations to cases, “Absent class members are parties for purposes of
being bound by the judgment, receiving the benefit of the tolling of the statute of
limitations, meeting the venue requirements, and having standing to appeal from
decisions and to object to and enforce settlements”).
15
Appellants labor mightily to distinguish In re Bridgestone/Firestone without
effect. See Smith Br. at 29. First, as in In re Bridgestone/Firestone, Mr.
McCollins’ adequacy was litigated exhaustively. See supra at 35-36. Second, the
fact that Mr. McCollins was represented by different counsel is not a material
difference between In re Bridgestone/Firestone and McCollins: the “‘use of the
same counsel in itself is hardly dispositive’ of whether a close relationship exists.”
Axcan Scandipharm Inc. v. Ethex Corp., 585 F. Supp. 2d 1067, 1080 n.16 (D.
Minn. 2007) (internal citation omitted). Third, that the District Court in McCollins
was a transferee court, as opposed to having original jurisdiction as in In re
Bridgestone/Firestone, is a distinction without a difference. “In a [multidistrict
litigation] action, the transferee judge has the same jurisdiction and power over the
pretrial proceedings that the transferor judge would have in the absence of the
transfer.” In re U.S. Office Prods. Co. Sec. Litig., 251 F. Supp. 2d 58, 64-65
(D.D.C. 2003). Fourth, the pleading of a RICO claim in In re
Bridgestone/Firestone did not control the holding in that case. The Seventh Circuit
made clear that its holding was not restricted to unnamed class members in RICO
claims. See In re Bridgestone/Firestone, 333 F.3d at 768 (identifying the broadly
applicable right of an absent class member to seek review of a class certification
decision as another way in which absent class members are treated as parties to a
class proceeding).
39
Case: 09-1069 Page: 49 Date Filed: 04/03/2009 Entry ID: 3533707
“district court . . . has the power, under Fed. R. Civ. P. 23 augmented by the All
Writs Act, to control conduct by absent class members that affects management or
disposition of the class action.” In re Piper Funds, Inc., Institutional Gov’t Income
Portfolio Litig., 71 F.3d 298, 300 n.2 (8th Cir. 1995). These precedents all
support the conclusion that appellants cannot relitigate class certification simply
class certification decision unless they first receive notice and the opportunity to
opt out. See Smith Br. at 37-40. Mr. Smith and Ms. Sperlazza are mistaken.
context. See, e.g., Putnam, 332 F.3d at 546-47. Procedural due process rights
depend not only on the nature of the right to be protected, but also on the burdens
16
In addition to applying an improper standard in determining the status of absent
class members, In re Bayshore and In re General Motors are distinguishable from
McCollins. In In re Bayshore, there was an express finding that the putative class
representative in the prior action did not adequately represent the class. 471 F.3d
at 1245. In In re General Motors, the Third Circuit remanded the prior action
because the district court had not adequately expressed the basis for class
certification. 134 F.3d at 139, 146. By contrast, in McCollins, the District Court
assumed the adequacy of the putative representative in deciding the propriety of
class certification (Smith Add. at A08), and made an express finding on Bayer’s
motion for an injunction that the putative representative had adequately and
vigorously represented the interests of the absent class members for the purpose of
seeking class certification (Smith Add. at A35).
40
Case: 09-1069 Page: 50 Date Filed: 04/03/2009 Entry ID: 3533707
that would come from providing greater levels of procedural protection. See
Matthews v. Eldridge, 424 U.S. 319, 334-35 (1976) (holding that due process
depends on a consideration of the right at issue, the risk of deprivation of that right,
Applying this reasoning, the Supreme Court held that notice and the
adjudicates the merits of their claims. Shutts, 472 U.S. at 811-12. But the merits
of appellants’ claims are not at issue; the District Court enjoined Mr. Smith and
Ms. Sperlazza only from relitigating the preliminary question of class certification.
Appellants’ due process rights must be evaluated in this context. See Putnam, 332
F.3d at 546-47 (due process is contextual). Here, not only is a lesser interest at
notice, and an opportunity to opt out, before the certification decision is made; it is
a post-certification step”). Such a burden would fall most heavily on putative class
representatives, who generally bear the costs of notice in a contested class action.
See, e.g., Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 178 (1974) (“The usual rule
is that a plaintiff must initially bear the cost of notice to the class”).
41
Case: 09-1069 Page: 51 Date Filed: 04/03/2009 Entry ID: 3533707
duplicative litigation; the defendant’s interest in not fighting again contests already
won; and plaintiffs’ interests by assuring that they will only be foreclosed from
relitigating class certification when – as here – their position has been fairly
this context.
Mr. Smith and Ms. Sperlazza assert that the full Shutts requirements
claims on the merits. See Smith Br. at 40-42. However, the value of absent class
decision; it does not trump all other competing interests. See, e.g., Sanneman v.
Chrysler Corp., 191 F.R.D. 441, 454-55 (E.D. Pa. 2000) (rejecting contention that
low value claims can supplant all other considerations in determining the propriety
notice and the opportunity to be heard be required before a court rules on class
certification. They did not provide notice before they sought class certification in
Smith.
42
Case: 09-1069 Page: 52 Date Filed: 04/03/2009 Entry ID: 3533707
Accordingly, appellants are subject to the District Court’s jurisdiction and are
Mr. Smith and Ms. Sperlazza also assert that binding absent class
length Taylor v. Sturgell, ___ U.S. ___, 128 S. Ct. 2161 (2008)). As the Seventh
the same issue. In Taylor, for example, the Supreme Court held that a Freedom of
Information Act claim fully litigated on the merits could not bar a subsequent
Freedom of Information Act claim brought by a different plaintiff. See Taylor, 128
43
Case: 09-1069 Page: 53 Date Filed: 04/03/2009 Entry ID: 3533707
S. Ct. at 2178-80. Significantly, the Court explicitly carved out class actions,
relitigating class certification and remain free to pursue their individual claims on
the merits. See Canady, 282 F.3d at 1018 (enjoining relitigation of class claims,
* * *
In sum, the District Court properly concluded, on the law and on the
facts, that the relitigation exception to the Anti-Injunction Act applied here and
appellants’ interests when he argued for certification of the same class in the
District Court, Mr. Smith and Ms. Sperlazza are subject to the personal jurisdiction
of the District Court and are bound by the McCollins certification decision.
Finally, Mr. Smith and Ms. Sperlazza argue that the District Court
abused its discretion in enjoining them from relitigating class certification because
the claims of absent class members are small and can only be pursued through
44
Case: 09-1069 Page: 54 Date Filed: 04/03/2009 Entry ID: 3533707
class litigation. Smith Br. at 40-42. 17 In essence, appellants are claiming the right
exception to the Anti-Injunction Act exists for the very purpose that appellants
result. See 28 U.S.C. § 2283. Mr. Smith and Ms. Sperlazza are making precisely
re Bridgestone/Firestone:
333 F.3d at 767. This Court adopted the same reasoning in Canady and In re Piper
Aircraft. See Canady, 282 F.3d at 1018 (“What appellants may not do is recycle
the same claims and issues in different courts, hoping to achieve the result they
desire”); In re Piper Aircraft, 551 F.2d at 219 (plaintiffs “ought not to have
17
As described above, McCollins rejected the argument that the small size of
economic loss claims supported certification of the putative class where the other
requirements for class certification were missing. See Smith Add. at A13-A14; see
also supra at 4.
45
Case: 09-1069 Page: 55 Date Filed: 04/03/2009 Entry ID: 3533707
The injunction issued here plainly fell within the scope of the District
Court’s discretion. The District Court carefully considered all of the factors
necessary for issuance of an injunction and concluded that Bayer had established
success on the merits by demonstrating that the McCollins order was entitled to
preclusive effect. See Smith Add. at A37. In finding that Bayer had demonstrated
irreparable injury, the District Court quoted this Court’s holding in Canady that “a
decided in a federal court.” See id. (quoting Canady, 282 F.3d at 1020). The
District Court also quoted Canady in concluding that the balance of harms favored
same issues in [another] forum does not constitute a legitimate harm.” Id. (quoting
Canady, 282 F.3d at 1020). Finally, the District Court determined that the public
against duplicative litigation. See id. at A38 (citing In re SDDS, Inc., 97 F.3d
1030, 1041 (8th Cir. 1996)). The District Court then carefully tailored the
injunction, barring Mr. Smith and Ms. Sperlazza only from relitigating the West
Virginia economic loss class; neither they nor any other member of the McCollins
putative class was enjoined from pursuing individual claims. See id. Thus,
46
Case: 09-1069 Page: 56 Date Filed: 04/03/2009 Entry ID: 3533707
issuance of the injunction was a proper exercise of the District Court’s discretion
such injunctions should be granted sparingly. See id. at A36-A37. The injunction
here arises from unusual circumstances unlikely to recur. Putative class actions
like Smith now can be removed to federal court (see Class Action Fairness Act of
2005, Pub. L. No. 109-2, 119 Stat. 4), dramatically reducing the risk of duplicative
litigation. Moreover, state court plaintiffs generally do not wait until seven years
into litigation – when the overwhelming majority of cases has been resolved – to
The potential harm to Bayer and to the integrity of the judicial system
is particularly acute here. Mr. Smith and Ms. Sperlazza’s certification motion
claims. 18 For the last seven years, Bayer has refused to settle those claims and has
channeled its resources to settling the claims of the people who actually suffered
the side effect that led to the withdrawal of Baycol – even though Bayer continues
to contest liability and has won each of the six Baycol jury trials. This settlement
18
See Castano, 84 F.3d at 746 (“In addition to skewing trial outcomes, class
certification creates insurmountable pressure on defendants to settle”); In re
Rhone-Poulenc Rorer Inc., 51 F.3d 1293, 1298 (7th Cir.), cert. denied 516 U.S.
867 (1995) (same).
47
Case: 09-1069 Page: 57 Date Filed: 04/03/2009 Entry ID: 3533707
program has led to the resolution of thousands of cases and payments to injured
plaintiffs of more than one billion dollars. See supra at 9-10. As the Baycol MDL
court, the District Court has overseen this settlement program to assure that it was
fairly and consistently administered for state and federal court cases. Now that
most plaintiffs’ cases have been resolved in reliance on the scope of this settlement
program, Mr. Smith and Ms. Sperlazza want to force Bayer to redirect its resources
to putative class members who suffered no side effects and who in fact benefited
The District Court, having presided over the Baycol MDL since late
court. The District Court did not abuse its discretion determining that the balance
* * *
barring Mr. Smith and Ms. Sperlazza from pursuing class certification in West
Virginia state court. Upon a finding that the relitigation exception to the Anti-
Injunction Act applied and that the Court had the authority under the All Writs Act
48
Case: 09-1069 Page: 58 Date Filed: 04/03/2009 Entry ID: 3533707
narrowly tailored injunction targeted to protect and effectuate its final judgment
denying class certification in the McCollins case. The Court should affirm the
CONCLUSION
Respectfully submitted,
Susan A. Weber
James W. Mizgala
James R.M. Hemmings
SIDLEY AUSTIN LLP
1 South Dearborn Street
Chicago, IL 60603
Tel: (312) 853-7000
saweber@sidley.com
jmizgala@sidley.com
jhemmings@sidley.com
49
Case: 09-1069 Page: 59 Date Filed: 04/03/2009 Entry ID: 3533707
Peter W. Sipkins
DORSEY & WHITNEY LLP
50 South Sixth Street, Suite 1500
Minneapolis, MN 55402
Tel: (612) 340-2600
sipkins.peter@dorsey.com
50
Case: 09-1069 Page: 60 Date Filed: 04/03/2009 Entry ID: 3533707
32(a)(7)(B) because:
51
Case: 09-1069 Page: 61 Date Filed: 04/03/2009 Entry ID: 3533707
I hereby certify that the PDF file containing the digital version of this
brief furnished to the Court on a CD-ROM has been scanned for viruses and is
virus-free.
52
Case: 09-1069 Page: 62 Date Filed: 04/03/2009 Entry ID: 3533707
CERTIFICATE OF SERVICE
of the Answer Brief of Appellee Bayer Corporation, one copy of the digital version
of the Answer Brief of Appellee Bayer Corporation, and one copy of the Separate
Richard A. Monahan
Marvin W. Masters
Charles M. Love, IV
THE MASTERS LAW FIRM LC
181 Summers Street
Charleston, West Virginia 25301
CH1 4621934v.11
53