Opinion
MDL Docket No. 1203, Civil Action No. 99-20593.
August 11, 2004
MEMORANDUM AND PRETRIAL ORDER NO.
Before the court is the motion of Wyeth to enforce this court's injunction entered in Memorandum and Pretrial Order ("PTO") No. 1415 against plaintiffs Doris Weller and Ellen Carey. Plaintiffs filed actions against Wyeth in the state courts of New York, which were then removed to the Eastern and Southern Districts of New York, respectively. Weller v. American Home Prods. Corp., 03 Civ. 3901 (E.D.N.Y.), and Carey v. American Home Prods. Corp., 03 Civ. 6657 (S.D.N.Y.). Thereafter, the cases were transferred by the Judicial Panel on Multidistrict Litigation to MDL No. 1203 for pretrial proceedings.
Wyeth was formerly known as American Home Products.
The present controversy centers on what restrictions are imposed on plaintiffs by the Nationwide Class Action Settlement Agreement entered into in the Diet Drug litigation concerning Wyeth's drugs, Pondimin and Redux. After a lengthy Fairness Hearing held in May, 2000 on the joint motion of the class representatives and Wyeth for an order certifying and approving the Nationwide Settlement Class embodied in the Settlement Agreement, the court issued PTO 1415 in August, 2000 granting the motion, certifying the class and approving the Nationwide Class Action Settlement Agreement ("Settlement Agreement"). The Settlement Agreement defined the class as persons who ingested Pondimin and/or Redux ("fen-phen") and sdivided the class into five subclasses based on the length of time a class member took diet drugs and whether or not he or she had been diagnosed as FDA positive as of September 30, 1999. See Settlement Agreement § II.C; PTO 1415 at 19.
A diagnosis of FDA positive based on an echocardiogram conducted between the commencement of Diet Drug use and September 30, 1999 is defined in relevant part as "a condition in which the Cardiologist interpreting the Echocardiogram, in the ordinary course of medical treatment, has issued a written report which clearly states that the individual has mild or greater regurgitation of the aortic valve and/or moderate or greater regurgitation of the mitral valve." Settlement Agreement § I.22.a. This definition applies to qualification for Fund A benefits. To qualify for Matrix compensation benefits, the claimant must present evidence that she had an echocardiogram prior to the end of the Screening Program meeting the requirements under § I.22.b. Id.
A diagnosis of FDA positive based on an echocardiogram conducted after September 30, 1999 is defined in relevant part as "mild or greater regurgitation of the aortic valve of the heart and/or moderate or greater regurgitation of the mitral valve."Id. at § I.22.b.
As set forth in PTO 1415:
The court hereby bars and enjoins all class members who have not, or do not, timely and properly exercise an Initial, Intermediate, Back-End or Financial Insecurity Opt Out right from asserting, and/or continuing to prosecute against AHP or any other Released Party any and all Settled Claims which the class member had, has or may have in the future in any federal, state or territorial court.
PTO 1415, ¶ 7. Any class member who has not properly opted out may seek benefits from the AHP Settlement Trust so long as they registered by certain deadlines. See Settlement Agreement § IV.
Wyeth argues that plaintiffs should be enjoined from pursuing their actions in the federal courts in New York because they did not timely exercise an intermediate opt-out under the Settlement Agreement. See In re Diet Drugs Prods. Liab. Litig., Nos. 1203 and 99-20593, PTO 1415, 2000 WL 1222042 (E.D. Pa. Aug. 28, 2000) (hereinafter referred to as "PTO 1415"). Plaintiffs do not dispute Wyeth's contention that they were not diagnosed as FDA positive until after the end of the Screening Period.
As reflected in PTO 1415, the Settlement Agreement established five subclasses for settlement purposes. The five subclasses generally consisted of the following:
Subclass 1(a) — all diet drug recipients who ingested Pondimin or Redux for sixty days or less and who were not diagnosed as FDA positive by September 30, 1999;
Subclass 1(b) — all diet drug recipients who ingested Pondimin or Redux for sixty-one days or more and who were not diagnosed as FDA positive by September 30, 1999;
Subclass 2(a) — all diet drug recipients who ingested Pondimin or Redux for sixty days or less and who have been diagnosed as FDA positive by September 30, 1999;
Subclass 2(b) — all diet drug recipients who ingested Pondimin or Redux for sixty-one days or more and who have been diagnosed as FDA positive by September 30, 1999; and
Subclass 3 — all diet drug recipients who have been diagnosed as having mild mitral regurgitation by an echocardiogram by the end of the screening period but not diagnosed as FDA positive by the end of the screening period. Persons in this subclass may also include those in subclasses 1(a) and 1(b).See Memorandum and PTO 1415 at 43-44. The Settlement Agreement provided four opportunities for class members to opt out: (1) initial opt-outs; (2) intermediate opt-outs; (3) back-end opt-outs; and (4) financial insecurity opt-outs.
Anyone exercising an initial opt-out is not part of the settlement and can sue Wyeth in the tort system without restriction. The initial opt-outs can seek both compensatory and punitive damages, and Wyeth can invoke any affirmative defense including the statute of limitations. A class member who is not a member of subclasses 2(a), 2(b), or 3 may exercise an intermediate or back-end opt-out if he or she was first diagnosed as having an FDA positive level of valvular regurgitation based on an echocardiogram performed between September 30, 1999 and the end of the Echocardiogram Screening Period. The Screening Period ended for most class members on January 3, 2003, although certain class members could be diagnosed as late as July 3, 2003. PTO 1415 at 25; Settlement Agreement § IV.D.3. Persons exercising intermediate or back-end opt-outs are able to bring independent actions against Wyeth but are only permitted to seek compensatory damages. See Settlement Agreement § IV.D.3.c. In return for the prohibition against punitive damages in these cases, Wyeth waived several defenses, including the statute of limitations, if the opt-out plaintiffs filed their actions within one year of exercising their opt-out rights. See Settlement Agreement § IV.D.3.c. Settlement Agreement § I.49. The deadlines by which one must elect an initial or an intermediate opt-out have now passed. Furthermore, in order to exercise a back-end opt-out, plaintiffs must have registered or be deemed to have registered for settlement benefits by May 3, 2003. See Settlement Agreement § IV.D.4.a.
See supra n2. A class member who is diagnosed as FDA positive or as having mild mitral regurgitation between diet drug use and the end of the Screening Period may exercise a back-end opt-out if he or she reaches a Matrix level condition after September 30, 1999. Any class member who elected the Accelerated Implementation Option ("AIO") cannot elect an intermediate or back-end opt-out. Under the AIO, class members who were satisfied with the settlement and who were willing to waive their initial, intermediate and back-end opt-out rights could obtain the benefits of the settlement prior to Final Judicial Approval. PTO 1415 at 74.
The Screening Program as defined in the Settlement Agreement referred to the twelve-month period beginning on the Final Judicial Approval Date during which benefits were available in the Screening Program, which is the "program for providing Transthoracic Echocardiograms and associated interpretive physician visit benefits." Settlement Agreement §§ I.49 and I.50. The Screening Program was extended for certain class members who properly registered for Screening Program benefits, but who did not receive an echocardiogram prior to the January deadline.See PTO 2677 (Dec. 10, 2002) at 9-10.
The opportunity to elect the initial opt-out ended on March 30, 2000. The deadline for electing the intermediate opt-out was May 3, 2003, except for those class members who received an extension to receive an echocardiogram through the Trust.
Having disregarded the procedures and deadlines set forth in the Settlement Agreement, plaintiffs now contend that they are not bound by the injunction imposed by PTO 1415 because they were not adequately represented in the class action proceedings and that enforcing the injunction against them would amount to a denial of due process. They argue they are entitled to attack collaterally the Settlement Agreement and the injunction of PTO 1415 in the courts to which their actions have been removed. Through their lawsuits, plaintiffs seek to test whether they "were proper parties to the Settlement Agreement who could, consistent with the Due Process Clause, be bound by the injunction against future litigation contained therein." Claimants Doris Weller and Ellen Carey's Opp'n to Wyeth's Mot. to Enforce the Anti-Suit Inj., Doc. No. 650, December 3, 2003.
As expressly provided in PTO 1415:
Without affecting the finality of this Final Order and Judgment in any way, the court hereby retains continuing and exclusive jurisdiction over this action and each of the Parties, including [Wyeth] and the class members, to administer, supervise, interpret and enforce the Settlement in accordance with its terms . . .
PTO 1415 at 72 ¶ 11. Furthermore, this court "has the power to enforce an ongoing order against relitigation so as to protect the integrity of a complex class settlement over which it retained jurisdiction." In re Prudential Insur. Co. of Am. Sales Practice Litig., 261 F.3d 355, 367-68 (3d Cir. 2001) (citing In re "Agent Orange" Prod. Liab. Litig., 996 F.2d 1425, 1431 (2d Cir. 1993)) ("Agent Orange").
Contrary to their argument, plaintiffs are not entitled to attach collaterally the Settlement Agreement in the forum of their choice. "[N]othing in the Constitution or in our jurisprudence demands that class members have an unchallengeable choice of forums" to collaterally attack a judgment. Agent Orange, 996 F.2d at 1432. See also In re Orthopedic Bone Screw Prods. Liab. Litig., 176 F.R.D. 158, 178 (E.D. Pa. 1997). This court approved the Settlement Agreement, entered a judgment enforcing it, and retained continuing and exclusive jurisdiction over the action and the parties "to administer, supervise, interpret and enforce the Settlement in accordance with its terms." PTO 1415 at 72 ¶ 11. As was true in the Agent Orange case, it is unlikely that the plaintiffs' claims could be properly addressed "without first deciding the scope of the . . . class action and settlement. The court best situated to make this determination is the court that approved the settlement and entered the judgment enforcing it." Agent Orange, 996 F.2d at 1431; see also PTO 1415. Here, the court is "not determining simply the preclusive effect of a prior final judgment on claims or issues expected to be raised in subsequent collateral proceedings." Agent Orange, 996 F.2d at 1431. Instead, it is "enforcing an explicit, ongoing order against relitigation of matters it had already decided, and guarding the integrity of its rulings in complex multidistrict litigation over which it ha[s] retained jurisdiction." Id. Thus, it is appropriate to preclude plaintiffs from going forward in another forum. Id.
In examining the adequacy of representation, PTO 1415 specifically addressed the "futures" problem identified inAmchem Products, Inc. v. Windsor, 521 U.S. 591 (1997) and relied upon by plaintiffs. In analyzing the issue, Judge Bechtle pointed out that the Diet Drug class members differed from theAmchem asbestos class members in the sense that all Diet Drug class members were aware of their exposure to Pondimin and/or Redux, which were removed from the market in 1997. See PTO 1415 at 46-47. The court's Memorandum notes that:
The clinical and epidemiological studies demonstrate — and all the experts agree — that insofar as the use of [the diet drugs] results in an increased prevalence of valvular regurgitation, that regurgitation is detectable by echocardiogram shortly after the patients discontinue the use of diet drugs. Conversely, there is no evidence that the use of the drugs results in any increased risk of regurgitation that is "latent" and not detectable by today's sophisticated echocardiographic technology. . . . The absence of a latency period between ingestion of [diet drugs] and the development of clinically detectable VHD is also confirmed by a number of studies that have followed former [diet drug] patients for a number of years, either through the use of echocardiograms or comprehensive medical record review. Each of these studies finds that there was no emergence of new disease after some latency period.Id. at 46 (internal footnote omitted). Additionally, PTO 1415 observed that VHD can be present with varying severity, with the milder forms tending not to progress and the moderate to severe forms tending to be progressive. Id. at 10. However, even upon consideration of a study suggesting that FDA thresholds might be too high to detect all valvular damage, the court determined that later studies demonstrated that "increased incidence of non-FDA positive levels of valvular regurgitation disappear within six months after exposure to the drugs." Id. at 57.
Valvular heart disease is referred to as "VHD."
Plaintiffs have not been denied due process. Although they claim they were unaware of their medical conditions at the time PTO 1415 was entered and they therefore had inadequate notice, both had actual notice of and the opportunity to participate in the Fairness Hearing prior to the court's approval of the Settlement Agreement. Upon approval of the Settlement Agreement, class members were advised that VHD can be asymptomatic but that a trained cardiologist is able to determine whether and to what degree a person has VHD by performing an echocardiogram. See Official Notice of Final Judicial Approval § B.2. Significantly, both Ms. Weller and Ms. Carey have submitted affidavits stating that they received notice of the settlement and disregarded it. See Aff. of Doris Weller, MDL Docket No. 1203, Civil Action No. 99-20593 (Dec. 3, 2003); Aff. of Ellen Carey, MDL Docket No. 1203, Civil Action No. 99-20593 (Dec. 3, 2003). Ms. Weller stated specifically, "despite receiving a notice of the settlement in the Brown v. American Home Products case, I gave it very little thought and, indeed, determined that there was no need for me to file for settlement benefits or to opt out of the class." Weller Aff., ¶ 6. Ms. Carey stated, "Because I thought I had suffered no injury and that, if I was going to develop any problems, I would have developed them already, I did not pay much attention to the class action settlement in Brown v. American Home Products. I never sought any settlement benefits, and I never requested to opt out; I simply ignored the settlement because I thought it did not affect me." Cary Aff., ¶ 5. Despite adequate notice of their rights, neither plaintiff timely opted out of the Settlement Agreement and both are bound thereby.
We will grant the motion of Wyeth to enforce this court's injunction against plaintiffs Doris Weller and Ellen Carey.
PRETRIAL ORDER NO.
AND NOW, this day of August, 2004, for the reasons set forth in the accompanying Memorandum, it is hereby ORDERED that:(1) the motion of Wyeth to enforce this court's injunction against plaintiffs Doris Weller and Ellen Carey (Doc. No. 564) is GRANTED; and
(2) plaintiffs Doris Weller and Ellen Carey and their agents, attorneys, and derivative claimants are ENJOINED from proceeding with, and plaintiffs are ORDERED to dismiss with prejudice their lawsuits against Wyeth, Weller v. American Home Products Corp., 03 Civ 3901 (E.D.N.Y.), and Carey v. American Home Products Corp., 03 Civ. 6657 (S.D.N.Y.).