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GEORGINE v. AMCHEM PRODS.

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA


September 21, 1994

ROBERT A. GEORGINE, et al., on behalf of themselves and others similarly situated, Plaintiffs,
v.
AMCHEM PRODUCTS, INC., et al., Defendants, and Third Party Plaintiffs, v. ADMIRAL INSURANCE COMPANY, et al., Third Party Defendants.

LOWELL A. REED, JR., J.

The opinion of the court was delivered by: LOWELL A. REED

MEMORANDUM

Reed, J.

 September 21, 1994

 FINDINGS OF FACT AND CONCLUSIONS OF LAW IN SUPPORT OF ISSUANCE OF PRELIMINARY INJUNCTION

 I. Introduction

 Currently before me is the motion of the Center for Claims Resolution ("CCR") defendants for an order confirming the court's issuance of a preliminary injunction restraining class members from initiating or prosecuting asbestos-related claims against the CCR defendants pending a final order in this proceeding (Document No. 1140), and the responses of various "objectors" thereto, *fn1" having found that notice of the CCR defendants' motion was duly served upon counsel of record, the Court makes the following:

 II. Findings of Fact2

 1. On January 15, 1993, the complaint was filed in this action seeking damages for personal injury resulting from asbestos-exposure on behalf of a putative class defined as:

 

(a) All persons (or their legal representatives) who have been exposed in the United States or its territories (or while working aboard U.S. military, merchant or passenger ships), either occupationally or through occupational exposure of a spouse or household member, to asbestos or to asbestos containing products for which one or more of the defendants may bear legal liability and who, as of January 15, 1993, reside in the United States or its territories, and who have not, as of January 15, 1993, filed a lawsuit for asbestos-related personal injury or damage, or death in any state or federal court against the defendant(s) (or against entities for whose actions or omissions the defendant(s) bear legal liability).

 

(b) All spouses, parents, children, and other relatives (or their legal representatives) of the class members described in paragraph 1 above who have not, as of January 15, 1993, filed a lawsuit for the asbestos-related personal injury, or damage, or death of a class member described in paragraph 1 above in any state or federal court against the defendant(s) (or against entities for whose actions or omissions the defendant(s) bear legal liability).

 2. Simultaneously with the filing of the complaint, the CCR defendants *fn3" filed an answer and the plaintiffs and defendants jointly filed a proposed stipulation of settlement ("Stipulation") and motion for conditional class certification.

 3. On January 29, 1993, the Honorable Charles R. Weiner of this Court conditionally certified the opt-out class.

 4. On October 6, 1993, this Court ruled that it had subject matter jurisdiction over this action. Carlough v. Amchem Products, Inc., 834 F. Supp. 1437 (E.D. Pa. 1993).

 5. On October 27, 1993, this Court ruled that the notice plan submitted to the Court by the settling parties was adequate and comported with due process and ordered the dissemination of the notice pursuant to the plan. Carlough v. Amchem Products, Inc., 1993 U.S. Dist. LEXIS 15379, 1993 WL 472812 (E.D. Pa. Oct. 28, 1993).

 6. Notice in accordance with the approved plan was disseminated commencing on November 1, 1993. Class members were given the opportunity to exclude themselves from the class by filing an appropriate exclusion form on or before January 24, 1994, at which time the opt-out period closed.

  7. On March 17, 1993, several absent members of the Carlough class brought a putative state-wide class action in state court in West Virginia seeking a declaratory judgment that the Stipulation was unenforceable against West Virginia class members and not entitled to full faith and credit. See Gore, et al. v. Amchem Products, Inc., C.A. No. 93-C-195. The CCR defendants sought, and were granted on May 5, 1993, a preliminary injunction by this Court, pursuant to the All-Writs Act, 28 U.S.C. § 1651 (1988) and the Anti-Injunction Act, 28 U.S.C. § 2283 (1970), barring further prosecution of the Gore action. I found that because "no action can be further along than one already settled," the existence of the Gore action would be disruptive to the plaintiffs, defendants and this Court in the attempt to manage this callosal settlement. See Carlough v. Amchem Products, Inc., 1993 U.S. Dist. LEXIS 6027, 1993 WL 144901 (E.D. Pa. May 5, 1993). The injunction was affirmed by the Court of Appeals for the Third Circuit on December 1, 1993. Carlough v. Amchem Products, Inc., 10 F.3d 189 (3d Cir. 1993).

 8. On August 16, 1994, after discovery and a full evidentiary hearing on the issue of fairness, this Court ruled that the Stipulation was fair to the class as a whole; that the class had been adequately and ethically represented by class counsel throughout the negotiations and the subsequent proceedings; and that notice to the class complied with Fed. R. Civ. P. 23 and the Due Process Clause. Accordingly, this Court approved the Stipulation as fair and finally certified the opt-out settlement class. The August 16, 1994 Order also provided that the "provisions of the Stipulation of Settlement, as amended, are hereby made part of the record in this case and as such shall have the full force and effect of an Order of this Court."

 9. Section II of the Stipulation provides that:

 

each Settlement Class Member, upon the Court's entry of an order approving the Stipulation as a good faith, ethical, fair, adequate, and reasonable settlement, and concluding that the Class of Claimants has received adequate notice and has been adequately and ethically represented by Class Counsel, shall be enjoined by that order from instituting or maintaining any claim or action for asbestos-related personal injury or damage against the CCR Defendant(s) or Additional Releasee(s) in any state or federal court, other than as set forth in this Stipulation.

 Stipulation, Section II, at 10.

 10. Since the expiration of the opt-out period, over 2,500 claims have been filed against one or more CCR defendants by individuals who did not file timely exclusion requests. *fn4" Without the relief sought here, class members will likely continue to pursue claims in other courts *fn5" and for the reasons discussed infra, I find that this continued litigation will immediately undermine and defeat the purpose and effect of the Stipulation now approved by this Court.

 11. A timely exclusion request is a request, signed by an individual class member, postmarked on or before January 24, 1994, which provides a reasonable indication of the individual's desire to opt out. The CCR defendants have agreed to treat lawsuits filed prior to January 24, 1994, which is the date when the opt-out period terminated, as timely exclusion requests and this Court accepts that determination.

 12. On August 24, 1994, the CCR defendants moved for an order preliminarily enjoining class members from initiating or further prosecuting asbestos-related personal injury or death claims in duplicative proceedings. *fn6" The CCR defendants' motion was served on all pro se litigants herein and approximately three hundred counsel of record either by Federal Express or United States mail. Counsel of record have stated, in their various filings during this litigation, that they represent substantially in excess of ten thousand putative class members.

 13. I find that suits relating to the same asbestos-related personal injury and death claims that are subject to the Georgine complaint that have been and are to be filed after January 24, 1994, by class members who failed to opt out of this class action, and the supporting actions of their attorneys and other people acting in concert with them, have and would disrupt, undermine, and otherwise defeat the implementation of the Stipulation now approved by this Court. Moreover, the existence of these types of actions "substantially increase the cost of litigation, would create a risk of conflicting results, and would prevent the plaintiffs from benefitting from [the] settlement already negotiated . . . ." See Carlough, 10 F.3d at 203 (quoting In re Baldwin-United Corp., 770 F.2d 328, 333 (2d Cir. 1985)). While it is impossible to determine with certainty the exact number of class members who will pursue such litigation, I find that the existence of over 2,500 claims filed against one or more of the CCR defendants by individuals who did not opt out of the class demonstrates a strong likelihood that these state court proceedings would seriously impair this Court's authority to preside over the Georgine settlement. Here, because the settlement was negotiated over a lengthy period and is now approved, and because numerous evidentiary bearings have been held regarding the settlement, the existence of these actions by class members as described above would serve only to impair this Court's jurisdiction by frustrating the implementation of the Georgine settlement, and the receipt of benefits to the class as a whole, the defendants and the public.

 14. If the injunction requested here is not issued, the CCR defendants will encounter claims by class members filed or pursued in multiple jurisdictions. As a result, the CCR defendants would be forced to defend the settled claims of class members in multiple jurisdictions and thus may be compelled to litigate the merits of the individual claims in courts all over the country. One result of which will be to undercut the financial planning and claims procedures provided in the Stipulation and, therefore, jeopardize the security of the existence of a fund to compensate class members for their injuries.

 15. Because the August 16, 1994 Order of this Court finally certified the opt-out settlement class pursuant to Fed. R. Civ. P. 23(b)(3) and approved the Stipulation as fair to the class as a whole pursuant to Fed. R. Civ. P. 23(e), it is probable that the CCR defendants will prevail on the merits. *fn7"

  16. If an injunction is not issued, the CCR defendants would suffer immediate and irreparable harm because the cost and time expended defending claims in multiple jurisdictions would likely result in the disintegration of the Georgine settlement and costs incurred by the CCR defendants from years of negotiation and court proceedings would be lost. Simply, forcing the CCR defendants to defend themselves in multiple actions would unduly burden the CCR defendants and the fund CCR administers for the benefit of all class members.

 17. Although some members of the class who file claims in other courts, who have not opted out of this action, could possibly theoretically suffer some harm due to the issuance of this injunction, in the form of (1) a decreased measure of potential damage awards, and (2) a possible delay in receipt of those awards, those injuries would be mitigated by the ability to settle or try their claims against other asbestos manufacturers who are not members of CCR for substantial sums of money, and by the benefits provided by the Georgine settlement, which are presently available to class members. *fn8" Some benefits that these class members would acquire from the Georgine settlement are the elimination of the risk of having to prove liability as they would under the applicable law, a negotiated settlement for cash sums due under the claims procedure or extraordinary claims procedure, security that funds will be available to compensate them for future illnesses due to exposure to asbestos, and the availability of damages for pain and suffering after a claimant suffering from mesothelioma dies. See Stipulation, Section VIII, at 57-57a. Because the Stipulation has been approved as fair, and because class members would be fairly compensated for injuries caused by asbestos manufactured or distributed by CCR defendants under the terms of the Stipulation, and because of the other benefits provided by the Georgine settlement, I find that the harm incurred by class members from the issuance of this injunction would neither be irreparable nor substantial. *fn9"

 18. Any harm to the interests of class members by the issuance of this preliminary injunction also will be mitigated because the filing of the complaint in this action has operated to toll any statute of limitation that otherwise might be running in favor of the CCR defendants. See Crown, Cork & Seal Company v. Parker, 462 U.S. 345, 350, 76 L. Ed. 2d 628, 103 S. Ct. 2392 (1983); American Pipe & Construction Co. v. Utah, 414 U.S. 538, 550-53, 38 L. Ed. 2d 713, 94 S. Ct. 756, reh'g denied, 415 U.S. 952, 39 L. Ed. 2d 568, 94 S. Ct. 1477 (1974); Philadelphia Electric Co. v. Anaconda American Brass Co., 43 F.R.D. 452, 460-61 (E.D. Pa. 1968). See also Ahern, C.A. No. 6:93cv526, at P 40. *fn10"

 19. Based on Findings of Fact PP 13, 14, and 16-18, I find that the benefits to the CCR defendants from an injunction are not outweighed by any concerned irreparable injury to absent class members.

 20. I find that the public would benefit from the issuance of an injunction. The public interest would not be served by permitting the burdensome and costly asbestos litigation to continue to proceed against the CCR defendants in multiple proceedings across the United States. As discussed in detail in this Court's August 16, 1994 memorandum opinion, resolution of asbestos claims under the Georgine Stipulation will inter alia, lower costs, shorten delays, produce consistent results, and provide assurance that compensation will be available to class members who suffer from asbestos related ailments in the future while not burdening the system unless and until that future date arrives.

 III. Conclusions of Law

 21. This Court has previously concluded that it has subject matter jurisdiction over this case pursuant to 28 U.S.C. § 1332 as the named parties are of diverse citizenship and the amount in controversy for each member exceeds $ 50,000. Carlough, 834 F. Supp. 1437.

 22. Because class members received reasonable notice, see Findings of Fact PP 5, 6, 8, 12, had an opportunity to be heard, to meaningfully partake in the litigation and were adequately represented, see Finding of Fact P 8, and had an opportunity to opt out from the class, see Findings of Fact PP 5, 6, this Court has jurisdiction over class members for the purposes of this injunction. See Carlough, 10 F.3d at 199-200. *fn11"

 23. I conclude that the efforts made by the CCR defendants to provide notice to class members of the present motion of the CCR defendants were effective and adequate.

 24. This Court has authority pursuant to the All-Writs Act, 28 U.S.C. § 1651 (1988) *fn12" and the Anti-Injunction Act, 28 U.S.C. § 2283 (1970) *fn13" to issue an injunction if the relief is necessary in aid of this Court's jurisdiction over the class action.

 25. For the reasons stated in Findings of Fact PP 13, 14, 16, 19, and 20, the issuance of an injunction restraining class members who have not excluded themselves from the class, their attorneys, and all other persons acting in concert with them, from initiating or pursuing their asbestos-related personal injury or death claims against any CCR defendant in any court other than this Court is necessary in aid of this Court's jurisdiction. *fn14" See In re Baldwin-United Corp., 770 F.2d at 337 ("The potential for an onslaught of state action posed more than a risk of inconvenience or duplicative litigation, rather, such a development threatened to 'seriously impair the federal court's flexibility and authority' to approve settlements in the multi-district litigation."); Carlough, 10 F.3d at 202 (same); In re Asbestos School Litigation, 1991 U.S. Dist. LEXIS 5142, 1991 WL 61156 at * 1 (E.D. Pa. Apr. 16, 1991), aff'd mem., 950 F.2d 723 (3d Cir. 1991) ("At this juncture, where the potential for resolution is gaining momentum in anticipation of trial, this court's ability to oversee a possible settlement would be 'seriously impaired' by the continuing litigation of parallel state actions such as [that of the nonmoving party's].").

 26. The issuance of an injunction in this case under the All-Writs Act and the Anti-Injunction Act is supported by authority both in and out of this jurisdiction. See Carlough, 10 F.3d 189 at 199-200; In re Asbestos School Litigation, 1991 U.S. Dist. LEXIS 5142, 1991 WL 61156; Ahern, C.A. No. 6:93cv526; In re Baldwin-United Corp., 770 F.2d 328; In re Corrugated Container Antitrust Litigation, 659 F.2d 1332 (5th Cir. Unit A Oct. 1981), cert. denied, Three J Farms, Inc. v. Plaintiffs' Steering Comm., 456 U.S. 936, 72 L. Ed. 2d 456, 102 S. Ct. 1993 (1982); Battle v. Liberty Nat'l Life Ins. Co., 877 F.2d 877 (11th Cir.), reh'g denied, en banc, 887 F.2d 1093 (11th Cir. 1989); Standard Microsystems Corp., 916 F.2d 58; James v. Bellotti, 733 F.2d 989 (1st Cir. 1984). *fn15"

 27. In addition, based on Findings of Fact PP 5, 6, 8, and 9, the issuance of an injunction restraining class members who have not opted out, their attorneys, and all other persons acting in concert with them, from initiating or pursuing their asbestos-related personal injury or death claims against any CCR defendant in any court other than this Court is appropriate because the August 16, 1994 Order of this Court incorporating therein the Stipulation of Settlement forms a basis for prohibiting them from pursuing an action against the CCR defendants in any other court.

 28. When ruling on a motion for a preliminary injunction, a district court should, in applying Fed. R. Civ. P. 65, *fn16" consider the following four factors: (1) the likelihood that the moving party will prevail on the merits at final hearing; (2) the extent to which the moving party is being irreparably harmed by the conduct complained of; (3) the extent to which the nonmoving parties will suffer irreparable harm if the preliminary injunction is issued; and (4) the public interest. S & R Corp., 968 F.2d at 374. All four factors should favor the requested relief before an injunction is issued. Id.

 29. Because I have found that, (1) there is a fair probability of eventual success on the merits, see Finding of Fact P 15 and supra note 7; (2) the CCR defendants will be irreparably harmed if they are forced to defend the claims of class members in multiple jurisdictions, see Findings of Fact PP 13, 14, 16; (3) the benefits to the CCR defendants from an injunction are not outweighed by any irreparable injury to absent class members who have not excluded themselves from the class, see Findings of Fact PP 13-18; and (4) the public interest will be served by prohibiting class members from pursuing their action against the CCR defendants in the state courts, see Finding of Fact P 20, I conclude that the issuance of an injunction is warranted. See Baldwin-United Corp., 770 F.2d at 337 ("If states or others could derivatively assert the same claims on behalf of the same class or members of it there could be no certaintly [sic] about the finality of any federal settlement.").

 30. As a general rule, the timely filing of a notice of appeal immediately confers jurisdiction on a Court of Appeals and divests a district court of its control over those aspects of the case involved in the appeal. Venen v. Sweet, 758 F.2d 117, 120 (3d Cir. 1985); H. Brad Kerr v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 1987 U.S. Dist. LEXIS 5363, 1987 WL 14515 at *2 n.1 (E.D. Pa. 1987). However, during the pendency of an appeal, a district court is not divested of jurisdiction to modify, restore or grant injunctions. Mary Ann Pensiero, Inc. v. Lingle, 847 F.2d 90, 97 (3d Cir. 1988); H. Brad Kerr, 1987 U.S. Dist. LEXIS 5363, 1987 WL 14515 at *2 n.1 (enjoining defendant from commencing any action in state or federal court based on Anti-Injunction Act, 28 U.S.C. § 2283, despite the filing of a notice of appeal). Here, notices of appeal have been filed some of which state that they relate to the injunctive effect of my August 16, 1994 Order (Document No. 1134). I conclude that the bases for the instant injunction, i.e., "necessary in aid of this Court's jurisdiction," Conclusion of Law P 25, are not the grounds for the injunction issued on August 16, 1994. Accordingly, because the filing of notices of appeal does not divest this Court of jurisdiction to grant injunctions, and because the issue relating to the present injunction is different from that presently on appeal, I conclude that this Court has jurisdiction to issue the instant injunction.

 An appropriate Order for preliminary injunction follows.

 PRELIMINARY INJUNCTION

 AND NOW, this 21st day of September, 1994, upon consideration of the motion of the Center for Claims Resolution ("CCR") defendants for an order confirming the court's issuance of a preliminary injunction restraining class members from initiating or prosecuting asbestos-related claims against the CCR defendants pending a final order in this proceeding (Document No. 1140), and the responses of various "objectors" thereto, having found that notice of the CCR defendants' motion was sent to almost three hundred counsel of record either by Federal Express or the United States mail, and based upon the attached Findings of Fact and Conclusions of Law, it is hereby ORDERED that the motion is GRANTED and, therefore, all members of the class certified by the Court by Order dated August 16, 1994, and each of them, who have not individually filed timely Exclusion Requests,1a their respective attorneys and all persons acting in concert with them and who receive a copy of this injunction or notice of the existence of this injunction, are hereupon PRELIMINARILY ENJOINED AND PROHIBITED from initiating or maintaining any asbestos-related personal injury or death claim(s) or lawsuit(s) against any CCR defendant2a in any court, either by way of commencing litigation, intervening in existing litigation, joining a CCR defendant in any existing litigation, or in any other manner asserting such a claim, or further prosecuting any claim filed after January 24, 1994 except to arrange for deferral of an action filed on or before the date of this Order until the issuance of final judgment on the merits of this case.

 IT IS FURTHER ORDERED that service of this Order (a) by Federal Express, by regular United States mail, or by facsimile upon pro se persons and counsel who have entered an appearance in this case and upon counsel who have filed cases in court on behalf of class members that are now subject to this injunction; (b) by Federal Express, by regular United States mail, or by facsimile to all of the following asbestos litigation reporting services: Asbestos Litigation Reporting Service, P.O. Box 248, Chalfont, PA 18914; Andrews Publications, P.O. Box 1000, Westtown, PA 19395; or Mealeys Publications, Inc., P.O. Box 446, Wayne PA 19087-0446; and (c) by facsimile to USA Today, the National Law Journal, and the Legal Times, no later than the 1st day of October, 1994 shall at this time constitute reasonable and sufficient notice to the class of the existence of this preliminary injunction.

 IT IS FURTHER ORDERED that the CCR defendants shall post a five hundred dollar ($ 500.00) cash bond or a form of security that is satisfactory to the Clerk of Court, upon which the injunction issued here shall become effective.

 IT IS FURTHER ORDERED that this Order shall remain in effect until further Order of this Court. Any request for a permanent injunction shall be directed to Judge Weiner for his consideration in issuing a final Order in this action.

 LOWELL A. REED, JR., J.


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