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In re American Investors Life Insurance Co. Annuity Marketing and Sales Practices Litigation

United States District Court, Third Circuit

July 10, 2013




The Aviva defendants[1] move the Court to enforce its final order and judgment as it relates to claims for restitution in a pending civil enforcement action commenced by the Commonwealth of Pennsylvania. The Attorney General of Pennsylvania has initiated a lawsuit in state court, alleging that the Aviva defendants violated the state's Unfair Trade Practices and Consumer Protection Law. The Aviva defendants now seek an injunction against two named plaintiffs and settlement class members, and all persons acting or purporting to act on their behalf, from seeking or receiving restitution or monetary relief from the defendants in connection with the Attorney General's lawsuit. The Court will grant the defendants' motion.

I. Factual Background

Defendants' motion pertains to this Court's supervision and approval of a settlement agreement in the instant action, a consolidated multidistrict litigation involving six putative class action lawsuits. In re Am. Investors Life Ins. Co. Annuity Mktg. & Sales Practices Litig. (In re Am. Investors), 263 F.R.D. 226, 228-29 (E.D. Pa. 2009). In brief, In re Am. Investors involved defendants' marketing and sale of long-term deferred annuity products. The class action plaintiffs alleged that defendants perpetrated a scheme to sell such products to senior citizens by misrepresenting and omitting information on the nature of the investments, inducing them to buy unnecessary estate planning instruments and annuities. Id. at 230. The oldest of these cases has been pending before the Court since 2004. Id.

A. Terms of the Stipulation of Settlement

On July 16, 2009, after five years of litigation, plaintiffs filed their unopposed motion for preliminary approval of a class-wide settlement, certification of the class, and an order directing issuance of notice to the class. Their motion included a stipulation of settlement and a proposed form of class notice. Id. at 229.

The stipulation of settlement defined the class as “[a]ll persons and entities that purchased Company Annuities issued during the Class Period and all persons and entities to which an ownership interest in such Company Annuities was subsequently assigned or transferred, or that otherwise held any interest as an Owner in such Company Annuities, during the Class Period . . . .” Id. at 230. In total, the settlement class consisted of over 387, 000 individuals.[2] Id.

Section X of the stipulation of settlement, entitled “Release and Waiver, ” explained the obligations taken on by the class members as part of the settlement. In relevant part, it states:

[T]he Named Plaintiffs and all Class Members, on behalf of themselves . . . and any other person or entity purporting to claim on their behalf, hereby expressly and generally release and discharge the Releasees[3] from any and all causes of action, claims, allegations of liability, damages, restitution, equitable, legal and administrative relief, interest, demands or rights whatsoever, including, without limitation, for all claims of actual monetary damages, for claims of injunctive or equitable type of relief, and for claims of mental anguish and/or punitive or exemplary damages, whether such claims are based on federal, state, or local law, statute, ordinance, or regulation (including, without limitation, federal or state insurance laws or regulations, RICO type laws, and securities laws or regulations), contract, common law, or any other source, relating to any Company Annuities and that were or could have been asserted against Defendants in the Complaint or any other complaint encompassed in the Action . . . or relating in any way to the Released Transactions, [4] and whether or not brought directly, indirectly, on a representative basis, or otherwise, including, but not limited to, actions brought on behalf of the Named Plaintiffs and/or Class Members by any state or federal government officials or agencies.

Id. at 248. In addition, Section X stated that plaintiffs agreed not to “institute, maintain, assert, join, or participate in, either directly or indirectly” any action against the Releasees “asserting causes of action, claims, allegations of liability, damages, restitution, injunctive, equitable, legal or administrative relief, interest, demands or rights” that were related to the facts alleged in the Complaint or related “in any way” to the Released Transactions. Id. at 248-49.

B. Notice to Class Members

The Court preliminarily approved the settlement and class notice on July 28, 2009. To disseminate the stipulation of settlement, the class notice, and the date of the fairness hearing to the putative class members, the parties retained the services of Rust Consulting, Inc. On August 28, 2009, Rust Consulting disseminated copies of the Court-approved class notice to the last known addresses of the class members via first-class, postage prepaid mail. Id. at 229; 232-33. A total of 13, 265 Pennsylvania residents received notices in their capacity as putative class members; only 32 submitted a request for exclusion from the class. Lake Decl. ¶ 9-11, attached to Def. Mot. to Enforce (Docket No. 547-3, at 3-4).

Multiple times throughout the class notice, class members were informed that if they did not exclude themselves from the class, they could not later bring suit against the defendants. For example, the notice stated that “Unless you properly exclude yourself, you are staying in the Class, and that means: (1) that you can't sue, continue to sue, or be part of or receive any benefits in or from any other lawsuit, arbitration, administrative or regulatory proceeding, order, or other legal proceeding anywhere against the Defendants . . . .” In re Am. Investors, 2011 WL 6046737, at *2 (Dec. 6, 2011).

Among those who were noticed through this process are the thirty-six individuals, including the two named plaintiffs, who are the focus of the instant motion. Rust Consulting did not receive any notification from the Postal Service indicating that the mail was not delivered to those thirty-six individuals. Indeed, none of the thirty-six individuals opted out of the settlement. Lake Decl. ¶ 13-15.

C. Fairness Hearing

On November 6, 2009, the Court held a fairness hearing on the proposed class settlement, at which counsel for plaintiffs and defendants spoke on behalf of their clients. No class members appeared at ...

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