The Third Circuit today dissolved an injunction that enjoined defendants from entering into a class action settlement.  The district court issued the injunction after it learned that the defendants might try to settle the case out from under it.  They would do so through settlement of other class litigation involving similar claims against some of the same defendants.  The court held that the enjoining court abused its discretion under the All Writs Act.  Grider v. Keystone Health Plan Central, Inc., Nos. 07-1231, 07-1232 & 07-1270 (3d Cir. Aug. 28, 2007).

The panel explained that the Grider plaintiffs had an adequate remedy at law under Rule 23(e) of the Federal Rules of Civil Procedure.  Rule 23(e) entitles them to object to settlement of the other litigation.  It also emphasized that it saw no evidence of a collusive effort to settle the Grider claims cheap.

The decision points up the challenges of overlapping lawsuits pending in different courts.  The competing class litigation, in Florida, involved post-Grider lawsuits that the Judicial Panel for Multi-district Litigation centralized there for pretrial proceedings.  The Grider case stayed in Pennsylvania because it had reached a more mature state of development before the centralization order.  Direct coordination thus became impossible.

Blawgletter nonetheless expects that the district judges will try to find a way to avoid stepping on each other’s magisterial toes.

Barry Barnett

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