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11/21/97 PRINCE GEORGE CENTER v. UNITED STATES

November 21, 1997

PRINCE GEORGE CENTER, INC. AND MBL LIFE ASSURANCE CORPORATION, ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED
v.
UNITED STATES GYPSUM COMPANY, NATIONAL GYPSUM COMPANY, W.R. GRACE & CO.-CONN., U.S. MINERAL PRODUCTS CO. AND ASBESTOSPRAY CORPORATION; APPEAL OF: THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, PIC REALTY CORPORATION AND 745 PROPERTY INVESTMENTS (COLLECTIVELY "PRUDENTIAL")



Appeal from the Order dated November 27, 1996, docketed December 2, 1996, Court of Common Pleas, Philadelphia County, Civil Division, at No. May Term, 1986 No. 5388. Before BONAVITACOLA, J.

Before: Beck, Johnson and Montemuro* , JJ. Opinion BY Johnson, J.

The opinion of the court was delivered by: Johnson

OPINION BY JOHNSON, J.:

FILED November 21, 1997

In this appeal we consider whether the notice procedure employed in a class action conducted in accordance with the Pennsylvania Rules of Civil Procedure was constitutionally sufficient to bind an absent plaintiff class member. We also consider whether the vigorous litigation between an absent plaintiff and the same defendants in a parallel out-of-state action requires the absent plaintiffs' exclusion from the class of settling plaintiffs after entry of final judgment. We conclude that the notice afforded the Prudential Insurance Company of America (Prudential) satisfied the requirements of due process. We also conclude that the distinguished trial Judge acted entirely within his discretion in denying Prudential's petition for exclusion from the plaintiff class or, in the alternative, a determination that its opt-out notice was timely. Accordingly, we affirm the order denying Prudential's petition and supplement thereto.

This class action was instituted May 30, 1986, by Peter Kalkus, an owner of Virginia office buildings, on behalf of owners of office buildings having United States Government tenants, against an array of asbestos manufacturers. On April 18, 1990, Prince George Center, Inc. intervened as class representative after Kalkus's claim was ruled barred by a Virginia statute of repose. On April 16, 1992, the Philadelphia Court of Common Pleas certified the class as follows:

Memorandum and Order, Kremer, J., dated April 16, 1992; R.R., Vol. I, at 268a. Notice of this order was never required. On May 7, 1993, the court ordered this action to proceed on an opt-out basis, as provided in Pa.R.Civ.P. 1711(a).

By early 1995, twenty-four of the twenty-eight non-bankrupt defendants in this action had executed settlement agreements with plaintiffs' counsel, contingent upon court approval. Settlement funds totaling $3,782,400 and a cash rebate program had been advanced. To facilitate court approval of these settlements, the court decertified the plaintiff class in February 1995, and certified a settlement class. The court conditionally certified a separate trial class, pursuant to Pa.R.Civ.P. 1710(d), to continue the litigation against the four non-settling defendants. The new classes were defined as:

And:

Amended Order, Bonavitacola, J., dated February 17, 1995, at PP 2, 4, attached as Exhibit G to Affidavit of Prudential's Counsel in Support of Petition for Declaratory Relief.

In October 1987, Prudential, as an owner of commercial buildings, sued the trial class defendants in the United States District Court for the District of New Jersey. Prudential's claim was for damages incurred and to be incurred as a result of asbestos in its buildings. By stipulation of the parties, on March 26, 1995, this suit was limited to eighteen Prudential buildings.

In February 1995, the Pennsylvania trial court ordered that notice of the settlements and their terms be sent to the settlement class and scheduled a hearing for objections and approval of the settlements for May 19, 1995. Class members could opt out of the settlement class by filing a written election with the court by April 18, 1995. A summary notice of the settlement was published twice in the Wall Street Journal and eight major metropolitan newspapers. A more detailed notice was sent by first class mail to 36,383 potential class members appearing on a list compiled by the General Services Administration and the United States Postal Service which contained the names and addresses of federal agency landlords. Prudential was identified as the owner of seven properties on this list and notices were mailed to each. None of these properties were involved in Prudential's New Jersey litigation.

On April 28, 1995, Steven A. Lauer, a member of Prudential's house counsel staff, executed the form to opt out of the settlement class on behalf of Prudential. On May 10, 1995, Robert Gilson, counsel to Prudential, drafted a letter to the Philadelphia Prothonotary for Lauer's signature indicating that Prudential did not want to be a member of any future class in the Prince George Center, Inc. action unless Lauer received notice and filed an affirmative election to participate. This letter was never sent.

By April 1996, the four remaining defendants in this action had executed settlement agreements. The trial court ordered that notice be given and that an approval hearing be held July 24, 1996. Exclusion requests were to be filed by July 9, 1996. Notice was disseminated in May 1996 to the same addresses as the earlier settlement notices, advertised in the same newspapers as the earlier notice, posted on the ...


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