interplay 131328-appellant brief

8/14/2019 Interplay 131328-Appellant Brief

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Docket No. 09-1069

In theUnited States Court of Appealsfor the Eighth Circuit

IN RE: BAYCOL PRODUCTS LITIGATION

PEGGY ANN MAYS, GEORGE F. MCCOLLINS,individually, and on behalf of all others similarly situated,

Plaintiffs,

KEITH SMITH, SHIRLEY SPERLAZZA,

Respondents-Appellants,v.

BAYER CORPORATION, a foreign corporation,

authorized to do business in West Virginia as Bayer Corporation,and also known as Bayer AG and Bayer Pharmaceutical,

Defendants-Appellees,

BAYER AG, a foreign corporation,

GLAXOSMITHKLINE, INC., a foreign corporation,SMITHKLINE BEECHAM CORPORATION,

GLAXOSMITHKLINE PLC, Defendants._______________________________________

Appeal from a decision of the United States District Court of Minnesota,Civil No. 02-199, MDL No. 1431

Honorable Michael J. Davis, Chief Judge

BRIEF OF APPELLANTS

RICHARD A.MONAHAN

MARVIN W.MASTERSCHARLES M.LOVE,IV

THE MASTERS LAW FIRM lc181 Summers Street

Charleston, WV 25301

(304) 342-3106

Attorneys for Appellants

COUNSEL PRESS (866) 703-9373 PRINTED ON RECYCLED PAPER

Case: 09-1069 Page: 1 Date Filed: 03/05/2009 Entry ID: 3523728


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I. SUMMARY OF THE CASEAppellants Keith Smith and Shirley Sperlazza are class representatives in

Smith, et al. v. Bayer Corp., et al., No. 01-C-191 (1-3) JPM, a civil suit filed in the

Circuit Court of Brooke County, West Virginia on September 20, 2001, seeking

class certification of a West Virginia-only class concerning claims regarding the

manufacture, sale, advertisement, warnings, and use of Baycol. A class-

certification hearing was scheduled in Smith for December 10, 2008. However, on

October 31, 2008, Appellee Bayer Corporation filed an expedited motion for a

permanent injunction, seeking to enjoin the class-certification hearing on the basis

that on August 25, 2008, the United States District Court for the District of

Minnesota in McCollins v. Bayer Corp., et al., No. 02-0199, had denied

certification of a proposed West Virginia class concerning economic loss claims

arising from the sale and use of Baycol. By Order entered on December 9, 2008,

the District Court granted Bayer Corporations expedited motion for a permanent

injunction.

Pursuant to 28 U.S.C. 1292(a)(1), Appellants now appeal such Order. Due

to the complexity of the issues, the irreparable harm caused Appellants, and the

far-reaching effects of the injunction, Appellants submit that oral argument is

justified and that 30 minutes per party should be sufficient time to complete such

oral argument.



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II. CORPORATE DISCLOSURE STATEMENTInasmuch as Appellants, Keith Smith and Shirley Sperlazza, are individual

persons rather than corporations, they have no relevant information to report. In

this regard, Appellants expressly note thatother than the corporate defendants

(and any corporations sufficiently related to the corporate defendants)Appellants

have no knowledge of any corporation which has a direct financial interest in their

claims.



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III. TABLE OF CONTENTS

I. SUMMARY OF CASE .................................................................................... 1

II. CORPORATE DISCLOSURE STATEMENT ............................................ 2

III. TABLE OF CONTENTS ................................................................................ 3

IV. TABLE OF AUTHORITIES .......................................................................... 5

V. JURISDICTIONAL STATEMENT .............................................................. 8

VI. STATEMENT OF ISSUES ............................................................................. 9

VII. STATEMENT OF CASE ................................................................................ 10

VIII. STATEMENT OF FACTS ............................................................................. 12

IX. SUMMARY OF ARGUMENT ....................................................................... 14

X. ARGUMENT .................................................................................................... 16

A. The Permanent Injunction Violates the Anti-Injunction Act, 28 U.S.C. 2283, And Principles OfFederalism And Comity .............................................................. 16

B. The Permanent Injunction Is Not Supported By TheRelitigation Exception To The Anti-Injunction Act,28 U.S.C. 2283, The All-Writs Act, 28 U.S.C. 1651(a), Or The Doctrine Of Collateral Estoppel. .................. 20

C. The District Courts Unwarranted Exercise Of Personal Jurisdiction Over State-Court Litigants and GrantsOf A Permanent Injunction Over A StateActionSeeking Class Certification Pursuant To

W.Va.R.Civ.P. 23 On The Basis Of An Order DenyingClass Certification Pursuant To Fed.R.Civ.P. 23



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Violates Due Process, As Well As The Beneficial AndSalutary Purposes Of The Class-Action Device, AndCauses Irreparable Damage To Appellants And TheClass They Seek To Represent .................................................... 35

1. The District Court Lacks PersonalJurisdiction Over Appellants And The ClassThey Seek To Represent. .............................................. 36

2. Granting The Permanent Injunction HasCaused The Appellants And The Class TheySeek To Represent Extreme And IrreparableHarm And Prejudice ...................................................... 40

XI. CONCLUSION ................................................................................................ 43



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IV. TABLE OF AUTHORITIES

A. CASES

Allen v. Stewart Title Guaranty Co., 06-cv-2426, 2007 WL 916859 (E.D. Pa.,March 20, 2007) .................................................................................................. 9, 25

Amchem Products, Inc. v. Windsor, 521 U.S. 591 (1997) ................................ 10, 41

Atlantic Coast Line R. Co. v. Brotherhood of Loc. Eng., 398 U.S. 281 (1970) ...... 9,17, 18, 19, 34

Bailey v. State Farm Fire and Casualty Co., 414 F.3d 1187 (10th Cir. 2005) ......... 21

Black, et al. v. Bayer Corp., et al., 02-0199 (D. Minn.) ........................................... 8

Canady v. Allstate Ins. Co., 282 F.3d 1005 (8th Cir. 2002). ............21, 22, 26, 28, 37

Caperton v. A.T. Massey Coal Co., Inc., ___ S.E.2d ____, 2008 WL 918444(W.Va. April 3, 2008) .............................................................................................. 19

Carlough v. Admiral Ins. Co., 10 F.3d 189 (3d Cir. 1993) ................................ 37, 38

Chick Kam Choo v. Exxon Corp., 486 U.S. 140 (1988) .............9, 18, 20, 25, 26, 34

Coopers & Lybrand v. Livesay, 437 U.S. 463, 98 S.Ct. 2454, 57 L.Ed.2d 351(1978) ....................................................................................................................... 22

DeBoer v. Mellon Mortgage Co., 64 F.3d 1171 (8th Cir. 1995) ........................ 10, 41

In re Bayshore Ford Trucks Sales, Inc., 471 F.3d 1233 (11th Cir. 2006) ......... 10, 30,39

In re Bridgestone/Firestone, Inc. Tires Prod. Liab. Litig., 333 F.3d 763 (7th Cir.2003) ....................................................................... 10, 28, 29, 30, 32, 33, 34, 40, 41

In re Diet Drugs Products Liability Litigation, 369 F.3d 293 (3d Cir. 2004) ........ 16,20, 36



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In re General Motors Corp. Pick-Up Truck Fuel Tank Prod. Liab. Litig., 134 F.3d133 (3d Cir. 1998) ...................................................... 9, 10, 20-21, 22, 24, 25, 30, 39

In re Rezulin Products Liability Litigation, 210 F.R.D. 61 (S.D.N.Y 2002) .......... 26

In re West Virginia Rezulin Litigation, 585 S.E.2d 52 (W.Va. 2003) ... 20, 27, 28,42

Johnson v. GlaxoSmithKline, Inc., 166 Cal.App.4th 1497, 83 Cal.Rptr.3d 607(Ct.App.2nd Dist. 2008) ..................................................................................... 32, 33

Johnson v. Fankell, 520 U.S. 911 (1997) ........................................................... 19, 20

J.R. Clearwater Inc. v. Ashland Chem. Co., 93 F.3d 176 (5th Cir. 1996) ........... 9, 22,

23, 24

Kent v. United of Omaha Life Ins. Co., 484 F.3d 988 (8th Cir. 2007) .................... 20

Kline v. Burke Construction Co., 260 U.S. 226 (1922) ....................................... 9, 17

Mace v. Van Ru Credit Corp., 109 F.3d 338 (7th Cir. 1997) ................................... 10

McCollins v. Bayer Corp., et al., No. 02-0199 (D.Minn.) ..................1, 8, 11, 13, 14,15, 21, 22, 26, 28, 33, 34, 35

Parsons Steel, Inc. v. First Ala. Bank, 474 U.S. 518 (1986) ................................... 19

Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985), 105 S.Ct. 2965 .......... 10, 32,37, 38

Randolph v. Rodgers, 170 F.3d 850 (8th Cir. 1999) ......................................... 16, 36

Robinette v. Jones, 476 F.3d 585 (8th Cir. 2007) ..................................................... 20

Smith, et al. v. Bayer Corp., et al., No. 01-C-191 (1-3) JPM (Cir. Ct. Brooke Co.,W.Va. Sept. 20, 2001) ....................................................................... 1, 10, 11, 12, 13

Stanton v. St. Jude Medical, Inc., 340 F.3d 690 (8th

Cir. 2003) .............................. 35

State ex rel. Johnson & Johnson Corp. v. Karl, 647 S.E.2d 899 (W.Va. 2007) ...... 19



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Syngenta Crop Protection, Inc. v. Henson, 537 U.S. 28 (2002) .................... 8, 36, 37

Taylor v. Sturgell, ___ U.S. ___, 128 S.Ct. 2161 (2008) ...................... 10, 30, 31, 32

Underwriters Natl Assurance Co. v. North Carolina Life & Accident & Health Ins.Guar. Assn, 455 U.S. 691 (1982) ........................................................................... 17

U.S. v. Buckner, 894 F.2d 975 (8th Cir. 1990) ......................................................... 36

Vendo Co. v. Lektro-Vend Corp., 433 U.S. 623 (1977).......................................... 19

Younger v. Harris, 401 U.S. 37 (1971) .................................................................... 17

B. STATUTES

18 U.S.C. 1965 ...................................................................................................... 29

28 U.S.C. 1292 .............................................................................................. 1, 9, 11

28 U.S.C. 1332 ........................................................................................................ 8

28 U.S.C. 1407 .................................................................................................. 9, 29

28 U.S.C. 1651 (1988) ............................................................................ 8, 9, 20, 21

28 U.S.C. 2283 (1970) ......................................................................8, 9, 16, 18, 20

W.Va. Code 46A-6-101 ........................................................................................ 12

C. OTHER AUTHORITIES

Fed. R. Civ. P. 23 .............................................................................10, 15, 22, 26, 35

Fed. R. App. P. 4 ........................................................................................................ 9

W. Va. R. Civ. P. 23.................................................................. 10, 19, 22, 26, 27, 35



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V. JURISDICTIONAL STATEMENT

A. District Courts Jurisdiction: Appellants submit that the UnitedStates District Court for the District of Minnesota lacked subject-matter

jurisdiction over them and the class they seek to represent. Appellants have only

filed claims under the substantive law of the State of West Virginia. Because

complete diversity of citizenship did not exist at the time of the filing of their

complaint, Appellants case was never removed to federal court pursuant to 28

U.S.C. 1332. Neither the All-Writs Act, 28 U.S.C. 1651(a), nor the

Relitigation Exception to the Anti-Injunction Act, 28 U.S.C. 2283, provide an

independent basis for federal subject-matter jurisdiction over appellants civil

action. Syngenta Crop Protection, Inc. v. Henson, 537 U.S. 28, 31-34 (2002).

However, Appellants recognize that this factor is distinct from whether the District

Court had the authority to issue an Order enjoining proceedings in a state-court

action.

Provided the injunction was otherwise appropriate, the All-Writs Act, 28

U.S.C. 1651(a), and the Relitigation Exception to the Anti-Injunction Act, 28

U.S.C. 2283, would authorize the District Court to issue the injunction in this

case because it had subject-matter jurisdiction over McCollins, the predecessor of

which, Black, et al. v. Bayer Corp., et al., had been removed to federal court

pursuant to 28 U.S.C. 1332 and then transferred by the Judicial Panel for



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Multidistrict Litigation to the United States District Court for the District of

Minnesota for consolidated, pretrial proceedings under 28 U.S.C. 1407.

B. Appellate Jurisdiction: This Court has the jurisdiction to hear appealsof interlocutory orders of a district court granting injunctions under 28 U.S.C.

1292(a)(1).

C. Timeliness: The District Courts Memorandum of Law and Ordergranting Bayer Corporations expedited motion for a permanent injunction was

entered on December 9, 2008. Appellants Notice of Appeal was timely filed on

January 6, 2009, in accordance with Fed.R.App.P. 4(a)(1)(A).

D. This Court has the jurisdiction to hear the appeal of the DistrictCourts Memorandum of Law and Order granting Bayer Corporations expedited

motion for a permanent injunction under 28 U.S.C. 1292(a)(1).

VI. STATEMENT OF ISSUES

A.The permanent injunction violates the Anti-Injunction Act, 28U.S.C. 2283, and principles of federalism and comity. SeeKline v. Burke Construction Co., 260 U.S. 226, 229-30 (1922);Coast Line R. Co. v. Brotherhood of Loc. Eng., 398 U.S. 281,286 (1970); Chick Kam Choo v. Exxon Corp., 486 U.S. 140,146-50 (1988).

B.The permanent injunction is not supported by the relitigationexception to the Anti-Injunction Act, 28 U.S.C. 2283, the All-Writs Act, 28 U.S.C. 1651(a), or the doctrine of collateralestoppel. See In re General Motors Corp. Pick-Up Truck FuelTank Prod. Liab. Litig., 134 F.3d 133, 146 (3d Cir. 1998); J.R.Clearwater Inc. v. Ashland Chem. Co., 93 F.3d 176, 180 (5

thCir. 1996); Allen v. Stewart Title Guaranty Co., No. 06-cv-



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2426, 2007 WL 916859, at **1-2 (E.D.Pa. March 20, 2007).See also Taylor v. Sturgell, ___ U.S. ____, 128 S.Ct. 2161,2171-73 & 1276 (2008).

C.The District Courts unwarranted exercise of personal jurisdiction over state-court litigants and grant of a permanentinjunction over a state action seeking class certificationpursuant to W.Va.R.Civ.P. 23 on the basis of an Order denyingclass certification pursuant to Fed.R.Civ.P. 23 violates dueprocess, as well as the beneficial and salutary purposes of theclass-action device, and causes irreparable damage toAppellants and the class they seek to represent. See PhillipsPetroleum Co. v. Shutts, 472 U.S. 797, 811-12 (1985); In reGeneral Motors Corp. Pick-Up Truck Fuel Tank Prod. Liab.

Litig., 134 F.3d 133, 141 (3d Cir. 1998); Taylor v. Sturgell, ___U.S. ____, 128 S.Ct. 2161, 2171-73 & 1276 (2008); AmchemProducts, Inc. v. Windsor, 521 U.S. 591, 617 (1997).

1. The District Court lacks personal jurisdiction over appellantsand the class they seek to represent. SeePhillips PetroleumCo. v. Shutts, 472 U.S. 797, 811-12 (1985); In re General

Motors Corp. Pick-Up Truck Fuel Tank Prod. Liab. Litig.,134 F.3d 133, 141 (3d Cir. 1998); In re Bayshore FordTrucks Sales, Inc., 471 F.3d 1233, 1245 (11th Cir. 2006).

But see In re Bridgestone/Firestone, Inc. Tires Prod. Liab.Litig., 333 F.3d 763, 768 (7th Cir. 2003).

2. Granting the permanent injunction has caused the appellantsand the class they seek to represent extreme and irreparableharm and prejudice. See Amchem Products, Inc. v. Windsor,521 U.S. 591, 617 (1997); Mace v. Van Ru Credit Corp.,109 F.3d 338, 344 (7th Cir. 1997); DeBoer v. Mellon

Mortgage Co., 64 F.3d 1171, 1175 (8th Cir. 1995).

VII. STATEMENT OF CASE

Appellants Keith Smith and Shirley Sperlazza are class representatives in

Smith, et al. v. Bayer Corp., et al., No. 01-C-191 (1-3) JPM, a civil suit filed in the



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Circuit Court of Brooke County, West Virginia on September 20, 2001, seeking

class certification of a West Virginia-only class concerning claims regarding the

manufacture, sale, advertisement, warnings, and use of Baycol. A class-

certification hearing was scheduled in Smith for December 10, 2008. However, on

October 31, 2008, Appellee Bayer Corporation filed an expedited motion for a

permanent injunction, seeking to enjoin the class-certification hearing on the basis

that on August 25, 2008, the United States District Court for the District of

Minnesota in McCollins v. Bayer Corp., et al., No. 02-0199, had denied

certification of a proposed West Virginia class concerning economic loss claims

arising from the sale and use of Baycol.

Appellants--who neither were class representatives in McCollins nor had

received notice ofMcCollins and the motions regarding class certification filed

therein--opposed Bayer Corporations expedited motion for a permanent

injunction. Appellants appeared specially to contest personal jurisdiction as well

as to argue the merits as to why the injunction should not be issued under the All-

Writs Act and the Relitigation Exception of the Anti-Injunction Act. By Order

entered on December 9, 2008, the District Court granted Bayer Corporations

expedited motion for a permanent injunction. Pursuant to 28 U.S.C. 1292(a)(1),

Appellants now appeal such Order.



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VIII. STATEMENT OF FACTS

On September 20, 2001, Appellants Keith Smith and Shirley Sperlazza,

together with Nancy Gandee,1 filed a civil action, Smith, et al. v. Bayer Corp., et

al., No. 01-C-191 (1-3) JPM (Cir.Ct. Brooke County, W.Va. Sept. 20, 2001), in the

Circuit Court of Brooke County, West Virginia, seeking class certification of a

West Virginia-only class concerning claims regarding the manufacture, sale,

advertisement, warnings, and use of Baycol. See Appendix, at pp. SA 96-115,

Smith Complaint, attached as Exhibit E to Bayer Corporations Expedited Motion

for Permanent Injunction. The Smith plaintiffs sought certification of a class of

all West Virginia residents and others who have ingested Cerivastatin, sold under

the trade name `Baycol in West Virginia and requested damages for personal

injury, medical monitoring, and economic loss. Id.

On September 30, 2008, Appellants filed a motion seeking certification of

only an economic-loss class based upon their claims of common-law fraud, breach

of warranties, and violations of the West Virginia Consumer Credit and Protection

Act (WVCCPA), W.Va.Code 46A-6-101, et seq. See Appendix, at pp. SA 116-

117, Smith Plaintiffs Motion for Certification of Class Action attached as Exhibit

1 Plaintiff Nancy Gandee settled her claims against Bayer in July 2003 and is nolonger a representative or member of the putative class in Smith. The plaintiffs hadalso originally sued two, non-diverse West Virginia citizens who subsequentlywere dismissed at or about the time that Nancy Gandee settled her claims.



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F to Bayer Corporations Expedited Motion for Permanent Injunction. A class-

certification hearing was scheduled in Smith for December 10, 2008.

However, on October 31, 2008, Appellee Bayer Corporation filed an

expedited motion for a permanent injunction, see Appendix, at pp. 21-24, seeking

to enjoin the class-certification hearing on the basis that on August 25, 2008, the

United States District Court for the District of Minnesota in McCollins v. Bayer

Corp., et al., No. 02-0199, had denied certification of a proposed West Virginia

class concerning economic-loss claims arising from the sale and use of Baycol.

See Appendix, at pp. SA 1-20, Addendum, at pp. A 1-20.

Appellants--who neither were class representatives in McCollins nor had

received notice ofMcCollins and the motions regarding class certification filed

therein--opposed Bayer Corporations expedited motion for a permanent

injunction. See Appendix, at pp. SA 293-311, Response in Opposition to Bayer

Corporations Expedited Motion for a Permanent Injunction.

Appellants/respondents appeared specially to contest personal jurisdiction as well

as to argue the merits as to why the injunction should not be issued under the All-

Writs Act and the Relitigation Exception of the Anti-Injunction Act. By Order

entered on December 9, 2008, the District Court granted Bayer Corporations

expedited motion for a permanent injunction. See Appendix, at pp. SA 383-400;



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Addendum, at pp. A 21-38. Appellants now appeal such Order and seek

dissolution of the injunction.

IX. SUMMARY OF ARGUMENT

The principles of federalism and comity upon which our Nation was founded

recognize and allow for the fact that litigation involving the same or similar

parties, issues, and claims may proceed concurrently in federal and state courts.

With only three narrowly-drawn exceptions, the Anti-Injunction Act prohibits

federal courts from interfering with proceedings in state courts. The exceptions

were designed to ensure the effectiveness and supremacy of federal law. Because

the effectiveness and supremacy of federal law is not at issue in this case, the

injunction issued by the District Court violates the Anti-Injunction Act as well as

the principles of federalism and comity upon which they are based.

The All-Writs Act only allows a federal court to issue an injunction if one of

the narrowly-drawn exceptions to the Anti-Injunction Act is applicable. The

relitigation exception to the Anti-Injunction Act, advanced by Bayer Corporation,

does not apply in this case. The doctrine of collateral estoppel may not be imposed

because (1) the issues being litigated were not identical, (2) the appellants were not

parties to or in privity with the plaintiffs in McCollins, and (3) a finding of

adequate representation was neither made by the District Court in its Order



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denying class certification in McCollins nor under the facts of such case should

have been made.

Furthermore, under the circumstances of this case, an injunction could not be

issued by the District Court because it lacked personal jurisdiction over the

Appellants and members of their putative class. The general rule is that one is not

bound by a judgment in personam in a litigation in which he is not designated as a

party or to which he has not been made a party by service of process. While absent

members of a class action may sometimes be treated as parties for preclusion

purposes, they should only be so treated when they have been afforded the due-

process protections of notice and the right to opt out afforded by Rule 23 of the

Federal Rules of Civil Procedure or a corollary state rule governing class actions.

Because such due-process protections are only afforded once a class action is

certified, absent class members should not be treated as parties in cases where class

certification is denied rather than granted.

One of the primary purposes of the class-action mechanism is that of

vindicating the rights of claimants with small damage claims who could not

feasibly as a matter of economics achieve justice through independent litigation.

However, based upon the District Courts injunction, independent litigation is the

only alternative which Appellants and members of their putative class now

possess. Accordingly, the District Courts issuance of an injunction based upon an



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order denying class certification has not only violated due process of law but has

also defeated this salutary purpose of class actions. Faced with this harsh reality,

Appellants and the members of their putative class have suffered irreparable harm

which far outweighs any harm caused Bayer Corporation by the possibility of

repetitious litigation.

X. ARGUMENT

A. The permanent injunction violates the Anti-Injunction Act, 28 U.S.C. 2283, and principles of federalism and comity.

Standard of Review: `The standard of review for the authority toissue an injunction under the Anti-Injunction Act and the All-WritsAct is de novo. . . . `We review the terms of an injunction for anabuse of discretion, underlying questions of law receive de novoreview, and factual determinations are reviewed for clear error. Inre Diet Drugs Products Liability Litigation, 369 F.3d 293, 304 (3dCir. 2004) (quoting In re Prudential Ins. Co. of Am. Sales Practices

Litig., 261 F.3d 355, 363 (3d Cir. 2001)). See also Randolph v.Rodgers, 170 F.3d 850, 856 (8th Cir. 1999) (noting that district courtsissuance of a permanent injunction is reviewed for an abuse ofdiscretion and that `[a]buse of discretion occurs if the district courtreaches its conclusion by applying erroneous legal principles orrelying on clearly erroneous factual findings (internal citationsomitted)).

The United States Supreme Court has long recognized that parallel state and

federal litigation do not cause jurisdictional interference requiring action.2 As the

2 The doctrines of federalism and comity are well entrenched in our jurisprudence.During the inception of our country--through its early years which witnessed theadoption of the Articles of Confederation and, after long debate and compromise,its subsequent replacement by our Constitution and Bill of Rights--our foundingforefathers wisely declined to have the new federal government usurp the entirety



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Supreme Court explained in Atlantic Coast Line R. Co. v. Brotherhood of Loc.

Eng., 398 U.S. 281, 286 (1970):

Thus from the beginning we have had in this country two essentiallyseparate legal systems. Each system proceeds independently of theother with ultimate review in this Court of the federal questions raisedin either system. Understandably this dual court system was bound tolead to conflicts and frictions. Litigants who foresaw the possibilityof more favorable treatment in one or the other system wouldpredictably hasten to invoke the powers of whichever court it wasbelieved would present the best chance of success. Obviously thisdual system could not function if state and federal courts were free tofight each other for control of a particular case. Thus, in order to

make the dual system work and to prevent needless friction betweenstate and federal courts, Oklahoma Packing Co. v. Oklahoma Gas &

Electric Co., 309 U.S. 4, 9, 60 S.Ct. 215, 218, 84 L.Ed. 537 (1940), itwas necessary to work out lines of demarcation between the twosystems. Some of these limits were spelled out in the [Judiciary Actof 1789, 1 Stat. 73]. Others have been added by later statutes as wellas judicial decisions. The 1793 anti-injunction Act was at least in parta response to these pressures.

Accord Kline v. Burke Construction Co., 260 U.S. 226, 229-30 (1922).

Accordingly, the Anti-Injunction Act generally prohibits federal courts from

interfering with proceedings in the state courts. The present version of the Anti-

Injunction Act provides:

A court of the United States may not grant an injunction to stayproceedings in a State Court except as expressly authorized by Act of

Congress, or where necessary in aid of its jurisdiction, or to protect oreffectuate its judgments.

of the new nations governmental functions. SeeYounger v. Harris, 401 U.S. 37,44 (1971); Underwriters Nat'l Assurance Co. v. North Carolina Life & Accident &

Health Ins. Guar. Ass'n, 455 U.S. 691, 703-04 (1982).



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28 U.S.C. 2283 (1970).

On its face the present Act is an absolute prohibition againstenjoining state court proceedings, unless the injunction falls withinone of three specifically defined exceptions. . . . Moreover since thestatutory prohibition against such injunctions in part rests on thefundamental constitutional independence of the States and theircourts, the exceptions should not be enlarged by loose statutoryconstruction. Proceedings in state courts should normally be allowedto continue unimpaired by intervention of the lower federal courts,with relief from error, if any, through the state appellate courts andultimately [the United States Supreme] Court.

Atlantic Coast Line R. Co. v. Brotherhood of Loc. Eng., 398 U.S. at 286-87.

AccordChick Kam Choo v. Exxon Corp., 486 U.S. 140, 146-50 (1988).

The exceptions to the Acts prohibition of injunctions were created to ensure

the effectiveness and supremacy of federal law. As explained by the Court:

Congress, however, has permitted injunctions in certain,specific circumstances, namely, when expressly authorized by statute,necessary in aid of the courts jurisdiction, or necessary to protect oreffectuate the courts judgment. These exceptions are designed toensure the effectiveness and supremacy of federal law. But as theCourt has recognized, the exceptions are narrow and are not [to] beenlarged by loose statutory construction. . . .

Chick Kam Choo v. Exxon Corp., 486 U.S. at 146 (quotingAtlantic Coast Line R.

Co. v. Brotherhood of Loc. Eng., 398 U.S. at 287).

Indeed, the Supreme Court has cautioned:

Any doubts as to the propriety of a federal injunction against statecourt proceedings should be resolved in favor of permitting the statecourts to proceed in an orderly fashion to finally determine thecontroversy. The explicit wording of 2283 itself implies as much,



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and the fundamental principle of a dual system of courts leadsinevitably to that conclusion.

Atlantic Coast Line R. Co. v. Brotherhood of Loc. Eng., 398 U.S. at 297.

Accordingly, the mere existence of a parallel lawsuit in state court that seeks

to litigate the same in personam action is not in itself sufficient grounds for the

federal court to stay the state proceedings. Vendo Co. v. Lektro-Vend Corp., 433

U.S. 623, 642 (1977). [I]nefficient simultaneous litigation in state and federal

courts on the same issue is one of the costs of our dual court system. Parsons

Steel, Inc. v. First Ala. Bank, 474 U.S. 518, 524-25 (1986).

It must be emphasized that in the relevant state-court proceeding, no issue of

federal law exists, the effectiveness or supremacy of which must be protected by

an injunction. Appellants have not pled any claim based on federal common or

statutory law. Accordingly, any class certification hearing held by the West

Virginia Circuit Court would involve only issues of the substantive law of the State

of West Virginia and its procedural law as set forth in Rule 23 of the West Virginia

Rules of Civil Procedure. Decisions of federal courts applying state substantive

law are not binding authority on any state court applying the same state law to the

same or similar set of facts. Johnson v. Fankell, 520 U.S. 911, 916-17 (1997);

State ex rel. Johnson & Johnson Corp. v. Karl, 647 S.E.2d 899, 913 n. 18 (W.Va.

2007); Caperton v. A.T. Massey Coal Co., Inc., ___ S.E.2d ____, 2008 WL

918444, at 24 (W.Va. April 3, 2008). Furthermore, it is clear that decisions of a



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federal court applying or interpreting the Federal Rules of Civil Procedure are not

binding on a state court applying or interpreting its own Rules of Civil Procedure

even if they are modeled on the Federal Rules. Johnson v. Fankell, 520 U.S. at

916;In re West Virignia Rezulin Litigation, 585 S.E.2d 52, 61 (W.Va. 2003).

Accordingly, the reason for which the exceptions to the Anti-Injunction

Acts prohibition of injunctions were designed, i.e., to ensure the effectiveness and

supremacy of federal law, simply do not exist in this case. See Chick Kam Choo v.

Exxon Corp., 486 U.S. at 146.

B. The permanent injunction is not supported by the relitigation exception to the Anti-Injunction Act, 28 U.S.C. 2283, the All-Writs Act, 28

U.S.C. 1651(a), or the doctrine of collateral estoppel.

Standard of Review: `The standard of review for the authority toissue an injunction under the Anti-Injunction Act and the All-WritsAct is de novo. In re Diet Drugs Products Liability Litigation, 369F.3d 293, 304 (3d Cir. 2004) (quotingIn re Prudential Ins. Co. of Am.Sales Practices Litig., 261 F.3d 355, 363 (3d Cir. 2001)). Theapplication of collateral estoppel is a question of law that we alsoreview de novo. Robinette v. Jones, 476 F.3d 585, 588 (8th Cir.2007). AccordKent v. United of Omaha Life Ins. Co., 484 F.3d 988,994 (8th Cir. 2007).

This Court has acknowledged:

While the relitigation exception to the Anti-Injunction Act

provides a justification for disregarding the Anti-Injunction Act, afederal court must also possess positive authority to issue aninjunction against state court proceedings. The All Writs Actprovides this authority, and empowers a federal court to protect the res

judicata and collateral estoppel effects of its prior judgments byenabling it to issue all writs necessary or appropriate in aid of theirrespective jurisdictions. 28 U.S.C. 1651. See In re General



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Motors Corp. Pick-Up Truck Fuel Tank Prod. Liab. Litig., 134 F.3d133, 143 (3d Cir. 1998) (If an injunction falls within one of [theexceptions to the Anti-Injunction Act], the All-Writs Act provides thepositive authority for federal courts to issue injunctions of state courtproceedings.).

Canady v. Allstate Ins. Co., 282 F.3d 1005, 1019-20 (8th Cir. 2002).

The All-Writs Act provides, in relevant part, that [t]he Supreme Court and

all courts established by Act of Congress may issue all writs necessary or

appropriate in aid of their respective jurisdictions and agreeable to the usages and

principles of law. 28 U.S.C. 1651(a) (1988).

The plain language of the All Writs Act establishes thepermissive, non-mandatory, nature of the courts power to issue aninjunction. See 28 U.S.C. 1651(a) (stating that courts . . . mayissue all writs) (emphasis added). So too is the relitigation exceptionto the Anti-Injunction Act. See Brooks[ v. Barbour Energy Corp.,804 F.2d 1144, 1146 (10th Cir. 1986)] (explaining that the Anti-Injunction act allows courts to issue injunctions in certaincircumstances). . . .

Bailey v. State Farm Fire and Casualty Co., 414 F.3d 1187, 1189 (10th Cir. 2005).

In the present case, contrary to the assertion of Bayer Corporation, the

injunction issued by the District Court was not justified under the relitigation

exception to the Anti-Injunction Act and the doctrine of collateral estoppel because

(1) the issues being litigated were not identical, (2) the appellants were not parties

to or in privity with the plaintiffs in McCollins, and (3) a finding of adequate



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representation was neither made by the District Court in its Order denying class

certification inMcCollins nor under the facts of such case should have been made.3

More specifically, as to the first factor, the issues which would be decided

by the West Virginia Circuit Court are not sufficiently identical to those issues

which were decided by the District Court in McCollins. Not only have appellants

asserted a common-law claim of fraud which was not asserted by the plaintiffs in

McCollins, but more importantly, the West Virginia Circuit Court would be

determining class certification issues under Rule 23 of the West Virginia Rules of

Civil Procedure rather than under Rule 23 of the Federal Rules of Civil Procedure

which was utilized by the District Court inMcCollins.

Two of the cases favorably cited by this Court in Canady, 282 F.3d at 1019

n. 9, are of particular relevance to this issue. In J.R. Clearwater Inc. v. Ashland

Chem. Co., supra, after noting that [a]n order denying class certification is not a

final judgment, and therefore is not appealable as a matter of right until conclusion

3Generally speaking, an order refusing to certify, or decertify, a class action is nota final judgment on the merits sufficient to satisfy the res judicata principlesunderlying the relitigation exception to the Anti-Injunction Act and may not beappealed as such. Coopers & Lybrand v. Livesay, 437 U.S. 463, 467-68 (1978);Canady, 282 F.3d at 1019 n. 9; In re General Motors Corp. Pick-Up Truck Fuel

Tank Prod. Liab. Litig., 134 F.3d at 146; J.R. Clearwater Inc. v. Ashland Chem.Co., 93 F.3d 176, 179 (5th Cir. 1996). The District Courts decision denying classcertification in McCollins v. Bayer Corp., et al., No. 02-0199, became appealablefollowing the entry of final judgment on Bayer Corporations motion for summary

judgment. Nonetheless, counsel representing the class representatives inMcCollins did not seek reconsideration from the District Court, an appeal to thisCourt, or a Writ of Certiorari to the United States Supreme Court.



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of the litigation in the district court[,] id., 93 F.3d at 179, the United States

Circuit Court of Appeals for the Fifth Circuit held:

While we are given to understand by correspondence fromcounsel that a final judgment was subsequently entered by the districtcourt one month after this case was argued before this panel, that doesnot change our disposition of the present appeal, given thediscretionary nature of the class certification determination generally.

The denial of class certification is a procedural ruling,collateral to the merits of a litigation. . . . , Deposit Guaranty Nat.

Bank v. Roper, 445 U.S. 326, 336, 100 S.Ct. 1166, 1173, 63 L.Ed.2d427 (1980), and the decision as to whether to certify a class lies within

the wide discretion of the trial court. Shipes v. Trinity Ind., 987F.2d 311, 316 (5th Cir.), cert. denied, 510 U.S. 991, 114 S.Ct. 548, 126L.Ed.2d 450 (1993); see also, 7B Charles Alan Wright, Arthur R.Miller and Mary Kay Kane, [Federal Practice and Procedure] 1785at 119 (court has broad discretion). While Texas Rule of CivilProcedure 42 is modeled on Rule 23 of the Federal Rules, and

federal decisions are viewed as persuasive authority regarding the

construction of the Texas class action rule, see American Exp.Travel Related Services Co. v. Walton, 883 S.W.2d 703, 708(Tex.App.-Dallas 1994, no writ); Ventura v. Banales, 905 S.W.2d423, 425 (Tex.app.-Corpus Christi 1995, no writ), a Texas courtmight well exercise this discretion in a different manner. It is our

considered view that the wide discretion inherent in the decision

as to whether or not to certify a class dictates that each court-or at

least each jurisdiction-be free to make its own determination in

this regard. See 18 Charles Alan Wright, Arthur R. Miller & EdwardH. Cooper, 4434 at 327 (If preclusion is to be denied, it should beon the ground that many procedural matters may be so fardiscretionary that a second court should be free to make its own

determination.). This reasoning is particularly applicable whenmatters of state-federal relations are involved as in the present

case in which an injunction would impinge upon the state court's

ability to exercise discretion in the administration of its own

docket contrary to the policies underlying the Anti-Injunction

Act.



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The element of discretion that inheres in this class certificationdetermination must be emphasized. Indeed, one Texas courtapplying the federal collateral estoppel rules concluded that

collateral estoppel did not bar relitigation of the class certification

issue in part because even those aspects of the state class action

rule which are identical to the federal rule have sometimes been

applied differently by the state courts. Morgan v. Deere Credit,Inc., 889 S.W.2d 360, 368 (Tex.App.-Houston (14th Dist.) 1994, nowrit). Therefore, the Texas court concluded that the identity ofissues necessary to collateral estoppel was lacking.

For the foregoing reasons, we conclude that the district courtdid not err in denying Ashlands motion to enjoin relitigation of theclass certification in state court. . . .

J.R. Clearwater Inc. v. Ashland Chem. Co., 93 F.3d at 180 (emphases added;

footnote omitted).

Similarly, in In re General Motors Corp. Pick-Up Truck Fuel Tank Prod.

Liab. Litig., supra, after stating that denial of class certification is not a

`judgment for the purposes of the Anti-Injunction Act while the underlying

litigation remains pending[,] id. at 146, the United States Circuit Court of Appeals

for the Third Circuit also held:

[T]he decision by this Court to reject the provisional settlement classis not a judgment with respect to the Louisiana settlementagreement, and our interpretation of Rule 23 is not binding on theLouisiana court. . . . [O]ur construction of Rule 23 and

application to the provisional settlement class is not controlling onthe Louisiana court, because it is not bound by our interpretation

of Rule 23. Rather, the Louisiana court properly applied La.CodeCiv. Proc. Ann. Arts. 591 and 592, the parallel Louisiana classcertification rule.



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Since appellants have failed to show that an exception to theAnti-Injunction Act under these circumstances was either expresslyauthorized by Congress, necessary in the aid of the MDL courts

jurisdiction, or necessary to protect or effectuate a final judgment ofthe MDL court, neither this Court nor the district court has theauthority to enjoin the Louisiana proceedings.

In re General Motors Corp. Pick-Up Truck Fuel Tank Prod. Liab. Litig., 134 F.3d

at 146 (emphases added; footnote omitted).

Relying upon the above precedent, the United States District Court for the

Eastern District of Pennsylvania held in Allen v. Stewart Title Guaranty Co., No.

06-cv-2426, 2007 WL 916859, at **1-2 (E.D.Pa. March 20, 2007):

In the instant action, the issues before the Court of CommonPleas for Philadelphia County are not identical to the issues

before this court, because the rules regarding class certification

are different. . . . The rules regarding class action are substantiallysimilar under Pennsylvania Rule of Civil Procedure 1702 and FederalRule of Civil Procedure 23, however, as in Texas, a Pennsylvaniacourt may exercise its discretion regarding class certification in a

different manner than a federal court. Since the discretion that isinherent in class certification decisions permits a state court to

consider a motion for class certification despite a federal court's

decision denying class certification, the reverse is also true, and afederal court is permitted to consider such a motion. Therefore, thecourt concludes that the matters are not identical, and the

doctrine of collateral estoppel does not apply.

(Emphases added; footnote omitted)).

The United States Supreme Courts decision in Chick Kam Choo v. Exxon

Corp., supra, also offers support on this issue. Addressing a similar distinction

between federal and state procedural rules, the Court explained:



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[T]he only issue decided by the District Court was that petitionersclaims should be dismissed under the federal forum non conveniensdoctrine. Federal forum non conveniens principles simply cannotdetermine whether Texas courts, which operate under a broad

open-courts mandate, would consider themselves an

appropriate forum for petitioners lawsuit. . . . Respondentsarguments to the District Court in 1980 reflected this distinction,citing federal cases almost exclusively and discussing only federal

forum non conveniens principles. . . . Moreover, the Court of Appealsexpressly recognized that the Texas courts would apply a significantlydifferent forum non conveniens analysis. . . . Thus, whether theTexas state courts are an appropriate forum for petitioners

Singapore law claims has not yet been litigated, and an injunction

to foreclose consideration of that issue is not within the

relitigation exception.

Chick Kam Choo v. Exxon Corp., 486 U.S. at 148-49 (emphases added).4

Bayer Corporations contention to the District Court that any differences

between Rule 23 of the Federal Rules of Civil Procedure and Rule 23 of the West

Virginia Rules of Civil Procedure are illusory5 is, itself, fiction. Its falsity is

readily revealed by merely contrasting the decisions in In re Rezulin Products

Liability Litigation, 210 F.R.D. 61 (S.D.N.Y. 2002), as well as the District Courts

own decision in McCollins, both applying Fed.R.Civ.P. 23 to deny class

4Appellants note that this Courts decision in Canady, supra, does not detract fromthis point. In Canady, the civil action sought to be enjoined had been removed to

federal court and, because it was believed that subject-matter jurisdiction existedfor the removal, this Court believed that the district court did not need to beconcerned about any distinction between federal and state procedural rules becauseunderErie principles and Fed.R.Civ.P. 81(c) the district court was to apply its ownprocedural rules. Canady, 282 F.3d at 1016-17 & 1019.5See Appendix, at pp. SA-280, Memorandum in Support of Bayer CorporationsExpedited Motion for a Permanent Injunction, at p. 10 & n. 5.



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certification of an economic-loss claim based on breach of express and implied

warranties and violation of the West Virginia Consumer Credit and Protection Act

involving pharmaceutical products, with the West Virginia Supreme Court of

Appeals decision inIn re West Virignia Rezulin Litigation, 585 S.E.2d 52 (W.Va.

2003), reversing a trial courts denial of such a class certification under

W.Va.R.Civ.P. 23.6

Indeed, before beginning its analysis in In re West Virignia Rezulin

Litigation, the West Virginia Supreme Court of Appeals cautioned:

The circuit court, in its order denying class certification, appears tohave relied almost exclusively on federal cases interpreting Rule 23 ofthe Federal Rules of Civil Procedure-and denying class certification-indrug or medical device actions. As we made clear in Syllabus Point 3ofBrooks v. Isinghood, 213 W.Va. 675, 584 S.E.2d 531 (2003), [a]federal case interpreting a federal counterpart to a West Virginia ruleof procedure may be persuasive, but it is not binding or controlling.Our reasoning for this rule is to avoid having our legal analysis of our

Rules amount to nothing more than Pavlovian responses to federaldecisional law. 213 W.Va. at 675, 584 S.E.2d at 531, (quoting Stonev. St. Josephs Hosp. of Parkersburg, 208 W.Va. 91, 112, 538 S.E.2d

6 In its Memorandum of Law and Order, entered on December 9, 2008, the DistrictCourt asserted that appellants reliance onIn re West Virignia Rezulin Litigation ismisplaced because [i]n In re Rezulin, the court rejected the argument thatindividual issues of damages predominated over common issues. In re Rezulin,585 S.E.2d at 74-75. In this case, however, this Court held that individual issues of

causation, not damages, predominated over common issues. Appendix, at pp.SA-389; Addendum, at pp. A-27. Appellants counsel were lead counsel inIn reWest Virginia Rezulin Litigation and as officers of the Court can assure this Courtthat the defendants argued and the trial court held in that case that individual issuespredominated over common issues on all questions of liability, causation, anddamages. A thorough review of the West Virginia Supreme Court of Appealsdecision inIn re West Virginia Rezulin Litigation will support this fact.



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389, 410 (2000) (McGraw, J., concurring, in part, and dissenting, inpart) (holding that West Virginia disability discrimination law is notmechanically tied to federal disability discrimination

jurisprudence.)).

In re West Virginia Rezulin Litigation, 585 S.E.2d at 61.

As to the second factor, Appellants were neither parties nor in privity with

parties in McCollins. Because Bayer Corporation is seeking to apply collateral

estoppel, it has the burden of proving all of the factors required for its application.

In its attempt to meet this factor, it has relied principally upon the Seventh

Circuits decision in In re Bridgestone/Firestone, Inc. Tires Prod. Liab. Litig.,

supra, and this Courts decision in Canady, supra.

As to this particular issue, this Courts decision in Canady is easily

distinguishable because, unlike the present appeal, the class representatives in the

subsequent civil actions filed in state court had also been class representatives in

the original federal action. Canady, 282 F.3d at 1012 (ten of the original

plaintiffs from Canady Ifiled two new class actions in Missouri state court). In

regard to the Seventh Circuits opinion in In re Bridgestone/Firestone, Inc. Tires

Prod. Liab. Litig.,Appellants submit that such decision is not well-reasoned and,

in fact, as will be discussed in greater detail below, violates due process of law.

Additionally, such decision is also distinguishable in several important aspects.

More specifically, it is true that the Seventh Circuit held in In re

Bridgestone/Firestone, Inc. Tires Prod. Liab. Litig., 333 F.3d at 767-69, that in



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addition to named-class representatives, members of the putative class may also be

treated as parties to the litigation for purposes of a collateral estoppel analysis.

However, in reaching this conclusion the Seventh Circuit noted several factors it

found relevant to a determination that its judgment denying certification of a

nationwide class action was sufficiently firm to be accorded conclusive effect for

collateral estoppel purposes and which are distinguishable from the present case.

Such factors include that (1) [i]t was the result of focused attention by counsel in

both the district court and [the Seventh Circuit]; both courts addressed the issue

exhaustively in published opinions and brought the debate to a conclusion; [and]

certiorari was sought and denied[;] (2) class counsel who was trying to start anew

by treating the judgment as irrelevant was the same class counsel who in the

original action had filed a master complaint seeking to resolve pretrial matters in a

manner so that a single disposition could be reached that would cover all suits no

matter where they had originally been filed; (3) the district court had original

jurisdiction and was not acting merely as a transferee court under 28 U.S.C.

1407; (4) one of the claims in the master complaint rested on RICO which

authorizes nationwide service of process, see 18 U.S.C. 1965(b). In re

Bridgestone/Firestone, Inc. Tires Prod. Liab. Litig., 333 F.3d at 767-68. None of

the above factors found relevant by the Seventh Circuit exist in the present case.



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In addition to the above factors, the Seventh Circuit did state that unnamed

class members have the status of parties for many purposes and are bound by the

decision whether or not the court otherwise would have had personal jurisdiction

over them. Id., 333 F.3d at 768. The validity of this statement at least as to

decisions denying certification which occur before any of the due process

protections afforded by Rule 23 are extended to putative class members would

appear to rest on a very weak foundation. First, as will be discussed in greater

detail in another section of this brief, other courts have refused to recognize the

existence of personal jurisdiction in such a situation. See, e.g., In re General

Motors Corp. Pick-Up Truck Fuel Tank Prod. Liab. Litig., 134 F.3d at 141; In re

Bayshore Ford Trucks Sales, Inc., 471 F.3d 1233, 1245 (11th Cir. 2006). Second,

the United States Supreme Courts recent decision in Taylor v. Sturgell, ___ U.S.

____, 128 S.Ct. 2161, 2171-73 & 1276 (2008), casts further doubt upon the

Seventh Circuits reasoning.

In Taylor, the United States Supreme Court rejected the theory of virtual

representation which had been adopted in several jurisdictions, including this

Circuit, in cases involving questions of claim and issue preclusion. In reaching its

decision, the Court initially noted:

A person who was not a party to a suit generally has not had afull and fair opportunity to litigate the claims and issues settled inthat suit. The application of claim and issue preclusion to nonpartiesthus runs up against the deep-rooted historic tradition that everyone



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should have his own day in court. Richards [v. Jefferson County,517 U.S. 793, 798, 116 S.Ct. 1761, 135 L.Ed.2d 76 (1996)] (internalquotation marks omitted). Indicating the strength of that tradition, wehave often repeated the general rule that one is not bound by a

judgment in personam in a litigation in which he is not designated as aparty or to which he has not been made a party by service of process.

Hansberry [v. Lee, 311 U.S. 32, 40, 61 S.Ct. 115, 85 L.Ed.2d 22(1940)]. See also, e.g.,Richards, 517 U.S., at 798, 116 S.Ct. 1761;

Martin v. Wilks, 490 U.S. 755, 761, 109 S.Ct. 2180, 104 L.Ed.2d 835(1989) . . . .

Taylor, 128 S.Ct. at 2171.

The Court noted that the rule against nonparty preclusion is subject to

exceptions and that [r]epresentative suits with preclusive effect on non parties

include properly conducted class actions . . . . Id., 128 S.Ct. at 2172 (citing

Martin, 490 U.S. at 762 n. 2; Fed.R.Civ.P.23) (emphasis added). The Court

distinguished the broad doctrine of virtual representation from the recognized

exceptions to the rule against nonparty preclusion based upon the requirements or

limitations imposed on nonparty preclusion based on adequate representation,

specifying that [i]n the class-action context, these limitations are implemented

by the procedural safeguards contained in Federal Rule of Civil Procedure

23. Id., 128 S.Ct. at 2176 (emphasis added). Obviously, the primary procedural

safeguards provided to absent class members under Rule 23 are notice and the right



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to opt outsafeguards which are only afforded when class certification is granted.7

SeePhillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985).

After recognizing the above facets of the Supreme Courts holding in

Taylor, the Court of Appeal for the Second District of California similarly opined

in Johnson v. GlaxoSmithKline, Inc., 166 Cal.App.4th 1497, 83 Cal.Rptr.3d 607

(Ct.App.2nd

Dist. 2008):

Emphasizing its rejection of a notion of virtual representation thatauthorizes preclusion based on identity of interests and some kind of

relationship between parties and non-parties shorn of the proceduralprotections prescribed in the class action rules, the Court noted thoseprotections are grounded in due process. (Ibid.)

The protections for absent class members prescribed by

rule 23, of course, are afforded after a motion for class

certification has been granted, not by the filing of a motion for

certification that is denied. Similarly, the concept of a properlyconducted class action suggests a class action that has been

certified, following a hearing in which the named representativeshave established they satisfy the requirements of rule 23, and thenlitigated to judgment or settled, not a individual lawsuit in which amotion for class certification was denied. Literally (and narrowly)read, therefore, Taylor v. Sturgell, supra, ___ U.S. ____, 128 S.Ct.2161 would appear to preclude the use of collateral estoppel tobar absent putative class members from seeking class certification

following the denial of a certification motion in an earlier lawsuit .. . .

7 Interestingly, the Seventh Circuit had rejected the doctrine of virtualrepresentation and inIn re Bridgestone/Firestone, Inc. Tires Prod. Liab. Litig., 333F.3d at 769, had attempted to distinguish such doctrine from its holding at issueherein. However, in light of the above discussion of the United States SupremeCourt in Taylor, it appears that the Seventh Circuits attempted distinction iswithout merit.



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Johnson, 166 Cal.App.4th at 1511 n. 8, 83 Cal.Rptr.3d at 618 n. 8 (emphases

added).8

As to the third reason noted above as to why the doctrine of collateral

estoppel cannot be applied in this case, Appellants reiterate that a finding of

adequate representation was neither made by the District Court in its Order

denying class certification in McCollins nor under the facts of such case should

have been made. One of the requirements for imposing collateral estoppel is that

the party had a full and fair opportunity to litigate the issue. This factor requires

both adequate representation by the named litigants and class counsel and a finding

of such adequate representation.

As noted by the Seventh Circuit in In re Bridgestone/Firestone, Inc. Tires

Prod. Liab. Litig., 333 F.3d at 768, [a] decision with respect to the class is

conclusive only if the absent members were adequately represented by the named

litigants and class counsel. The court noted that the district court had found that

both the named plaintiffs and their lawyers had furnished adequate representation

to the other members of the putative classes and that such decision had never been

challenged in the original appeal or the subsequent appeal. Id., 333 F.3d at 768-69.

Additionally, the court had earlier noted that that the representation had involved

8 Appellants recognize that the above discussion of the court in Johnson is dictasince the court did not rely upon it in reaching its holding. Appellants believe thatits discussion is nonetheless well-reasoned and cite and quote it with the hope thatthis Court might too find it persuasive.



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the focused attention by counsel in both the district court and on appeal in the

circuit court with the result of the issue of class certification being addressed

exhaustively in two published opinions and a writ of certiorari to the United States

Supreme Court being sought and denied. Id., 333 F.3d at 767. Appellants submit

that such holdings further distinguish this case from In re Bridgestone/Firestone,

Inc. Tires Prod. Liab. Litig.

First, the District Court in this case did not make an actual finding of

adequate representation in its Order of August 25, 2008, in McCollins. Rather, for

purposes of its analysis, the District Court merely assumed adequate representation

without deciding the issue. See Appendix, at pp. SA-008; Addendum, at p. A-08.

In Chick Kam Choo v. Exxon Corp., supra, the United States Supreme Court,

relying upon its earlier holding inAtlantic Coast Line, supra, stressed that in order

for the relitigation exception to be applied relevant issues must be actually decided

by the federal court and that an assessment of the precise state of the record and

what the earlier federal order actually said must be conducted. Chick Kam Choo v.

Exxon Corp., 486 U.S. at 148. The Court further cautioned that a district court is

not permitted to render a post hoc judgment as to what the order was intended to

say. Id. Accordingly, the District Courts post hoc judgment that adequate

representation was provided in McCollins in its Order of December 9, 2008, is

insufficient to cure this defect. See Appendix, at pp. SA-396-397; Addendum, at p.



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A-34-35. See also Appendix, at p. SA-373, Transcript of 12/05/08 Hearing, at p.

51.

Second, as an alternative matter, Appellants submit that adequate

representation should not and cannot be reasonably found in the McCollins case.

Class counsel in McCollins did not seek reconsideration by the District Court,

appeal its decision to this Court, or seek a writ of certiorari with the United States

Supreme Court. If a court is going to hold that a decision denying class

certification is going to forever bar any of the putative class members from ever

filing a class action, such court should be convinced that every possible, reasonable

step was taken to have such decision reviewed for error. Justice and due process

should demand nothing less.

Accordingly, for all of the above reasons, the relitigation exception to the

Anti-Injunction Act and the doctrine of collateral estoppel do not support Bayers

request for an injunction.

C. The District Courts unwarranted exercise of personal

jurisdiction over state-court litigants and grant of a permanent

injunction over a state action seeking class certification

pursuant to W.Va.R.Civ.P. 23 on the basis of an Order denying

class certification pursuant to Fed.R.Civ.P. 23 violates due

process, as well as the beneficial and salutary purposes of theclass-action device, and causes irreparable damage to

Appellants and the class they seek to represent.

Standards of Review: The issue of whether a party has establishedpersonal jurisdiction is reviewed de novo. Stanton v. St. Jude

Medical, Inc., 340 F.3d 690, 693 (8th Cir. 2003). Our review of



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federal constitutional questions is, of course, de novo. U.S. v.Buckner, 894 F.2d 975, 978 (8th Cir. 1990). `We review the terms ofan injunction for an abuse of discretion, underlying questions of lawreceive de novo review, and factual determinations are reviewed forclear error. In re Diet Drugs Products Liability Litigation, 369 F.3d293, 304 (3d Cir. 2004) (quoting In re Prudential Ins. Co. of Am.Sales Practices Litig., 261 F.3d 355, 363 (3d Cir. 2001)). See also

Randolph v. Rodgers, 170 F.3d 850, 856 (8th Cir. 1999) (noting thatdistrict courts issuance of a permanent injunction is reviewed for anabuse of discretion and that `[a]buse of discretion occurs if thedistrict court reaches its conclusion by applying erroneous legalprinciples or relying on clearly erroneous factual findings (internalcitations omitted)).

1. The District Court lacks personal jurisdiction overappellants and the class they seek to represent.

As a preliminary matter, it is important to recognize that neither the Anti-

Injunction Act nor the All-Writs Act satisfy the jurisdictional prerequisites of

subject-matter jurisdiction and personal jurisdiction. In Syngenta Crop Protection,

Inc. v. Henson, 537 U.S. 28, 31-34 (2002), the United States Supreme Court held

that the All-Writs Act did not give a federal court authority to remove a state-court

case in order to prevent frustration of orders a federal court had previously issued,

and that removal was only proper if the federal court independently would have

had original subject-matter jurisdiction over the state-court case. Section 1441

requires that a federal court have original jurisdiction over an action in order for it

to be removed from a state court. The All Writs Act, alone or in combination with

the existence of ancillary jurisdiction in a federal court, is not a substitute for that



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requirement. Id., at 34.9

As to personal jurisdiction, the Third Circuit Court of Appeals in Carlough

v. Admiral Ins. Co., 10 F.3d 189, 198 (3d Cir. 1993), explained:

We note that neither the Anti-Injunction Act, 28 U.S.C. 2283(1970), nor the All-Writs Act, 28 U.S.C. 1651 (1988), dispels thefederal court's jurisdictional requisite or divests the West Virginiacourt of its jurisdiction to adjudicate the Gore action, but rather the

judicial authority extended by the Acts is wholly derivative in nature.Thus the application of the Anti-Injunction and All-Writs Acts shouldhave beenprecededby the satisfaction of jurisdictional prerequisites.See Atlantic Coast Line R. R. Co. v. Brotherhood of Locomotive.

Engineers, 398 U.S. 281, 287, 90 S.Ct. 1739, 1743, 26 L.Ed.2d 234(1970) (exceptions to 2283 should not be enlarged by liberalstatutory construction).

In Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985), the United States

Supreme Court acknowledged that a judgment issued without proper personal

jurisdiction over an absent party is not entitled to full faith and credit elsewhere

and thus has no res judicata effect as to that party. Phillips Petroleum Co. v.

Shutts, 472 U.S. at 805, 105 S. Ct. at 2971. The Court further agreed that a chose

in action is a constitutionally recognized property interest possessed by each of the

[absent class-action] plaintiffs. Id., 472 U.S. at 807, 105 S.Ct. at 2972.

Addressing what due process rights must be afforded an absent class-action

9 Accordingly, this Courts belief in Canady, 282 F.3d at 1012-13, that subject-matter jurisdiction existed for removal pursuant to the All-Writs Act was incorrect,and the district court should have been required to consider any relevantdifferences between federal and state procedural rules before determining whetheran injunction was appropriate under the relitigation exception to the Anti-Injunction Act. Seeid., 282 F.3d at 1016-17 & 1019. See footnote 4 supra.



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plaintiff, the Court held:

Because States place fewer burdens upon absent class plaintiffsthan they do upon absent defendants in nonclass suits, the DueProcess Clause need not and does not afford the former as muchprotection from state-court jurisdiction as it does the latter. TheFourteenth Amendment does protect persons, not defendants,however, so absent plaintiffs as well as absent defendants are entitledto some protection from the jurisdiction of a forum State which seeksto adjudicate their claims. In this case we hold that a forum State mayexercise jurisdiction over the claim of an absent class-action plaintiff,even though that plaintiff may not possess the minimum contacts withthe forum which would support personal jurisdiction over a defendant.If the forum State wishes to bind an absent plaintiff concerning a

claim for money damages or similar relief at law, it must provideminimal procedural due process protection. The plaintiff must receivenotice plus an opportunity to be heard and participate in the litigation,whether in person or through counsel. The notice must be the bestpracticable, reasonably calculated, under all the circumstances, toapprise interested parties of the pendency of the action and affordthem an opportunity to present their objections. Mullane, 339 U.S.,at 314-315, 70 S.Ct., at 657; cf. Eisen v. Carlisle & Jacquelin, 417U.S. 156, 174-175, 94 S.Ct. 2140, 2151, 40 L.Ed.2d 732 (1974). Thenotice should describe the action and the plaintiffs' rights in it.Additionally, we hold that due process requires at a minimum that anabsent plaintiff be provided with an opportunity to remove himselffrom the class by executing and returning an opt out or request forexclusion form to the court. Finally, the Due Process Clause ofcourse requires that the named plaintiff at all times adequatelyrepresent the interests of the absent class members. Hansberry, 311U.S., at 42-43, at 61 S.Ct., at 118-119, 120.

Id., at 811-12, at 2974. See Carlough, 10 F.3d at 199-200 (explaining the

analysis).

These West Virginia respondents know of no basis for the District Court to

assert personal jurisdiction over them under the facts and circumstances of this



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case. If the above requirements exist for absent class-action plaintiffs in a case

where class certification is granted, how in all fairness can there be no due process

requirements for absent class-action plaintiffs where class-action certification has

been denied in a prior action? Appellants note that other courts have refused to

recognize the existence of personal jurisdiction in such a situation. See, e.g.,In re

General Motors Corp. Pick-Up Truck Fuel Tank Prod. Liab. Litig., 134 F.3d at

141 (But here, in the wake of our judgment in GM I, there is no class pending

before the MDL court, and thus, virtually none of the 5.7 million class members in

Louisiana are before this Court in any respect, and there is no basis upon which we

can infer their consent. . . . To be more precise, the Louisiana class members are

not parties before us; they have not constructively or affirmatively consented to

personal jurisdiction; and they do not, as far as has been demonstrated, have

minimum contacts with Pennsylvania. Therefore, due process deprives us of

personal jurisdiction and prevents us from issuing the injunction prayed for by

appellants. (footnote omitted));In re Bayshore Ford Trucks Sales, Inc., 471 F.3d

1233, 1245 (11th Cir. 2006) (Here, the district court refused to grant class

certification in the Bayshore Action . . . Once this decision was made, Westgate

became a stranger to the Bayshore Action. . . . The denial of class certification

limited the court's in personam jurisdiction solely to the parties appearing before it,



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namely the Bayshore Dealers and Ford. Consequently, the denial could not have

been binding on Westgate. (citation and footnote omitted)).

To the extent that Bayer Corporation and the District Court relies uponIn re

Bridgestone/Firestone, Inc. Tires Prod. Liab. Litig., supra, to support the

injunction in this case, appellants submit for all of the reasons previously discussed

in this brief that such decision is either unpersuasive, incorrect, or distinguishable.

Accordingly, for all of the foreging reasons, there is no legitimate and valid

basis for the assertion of personal jurisdiction over Appellants in this matter.

2. Granting the permanent injunction has caused the

appellants and the class they seek to represent extreme and

irreparable harm and prejudice.

Bayer Corporation and apparently10 the District Court believe that no

significant harm, let alone irreparable harm, will befall the Appellants and the class

they seek to represent by the injunction issued in this case, because Appellants and

any potential class members can simply bring their own independent actions

against Bayer Corporation. Indeed, being of like mind, the Seventh Circuit inIn re

Bridgestone/Firestone, Inc. Tires Prod. Liab. Litig., reached this same conclusion,

stating:

10 Appellants say apparently because the District Court failed to address theirargument concerning the harm caused them by an injunction in its Order ofDecember 9, 2008. See Appendix, at pp. SA-399-400; Addendum, at p. A-37-38.See alsoAppendix, at pp. SA-371-372, Transcript of 12/05/08 Hearing, at pp. 49-50.



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Every person included in the district courts class definition stillhas the right to proceed on his own. What such person now lacks isthe right to represent a national class of others similarly situated;thats the upshot of a fully contested litigation in which everypotential class member was adequately represented on this issue.

Id., 333 F.3d at 769.

While a nice thought in theory, such conclusion ignores the reality of the

situationthe very reality which led to the creation of the class-action device. As

acknowledged by the United States Supreme Court in Amchem Products, Inc. v.

Windsor, 521 U.S. 591 (1997),

While the text of Rule 23(b)(3) does not exclude fromcertification cases in which individual damages run high, the AdvisoryCommittee had dominantly in mind vindication of the rights ofgroups of people who individually would be without effective

strength to bring their opponents into court at all. Kaplan,Prefatory Note 497. . . :

The policy at the very core of the class action mechanism is toovercome the problem that small recoveries do not provide the

incentive for any individual to bring a solo action prosecuting his

or her rights. A class action solves this problem by aggregating therelatively paltry potential recoveries into something worth someone's(usually an attorney's) labor.

Amchem Products, Inc., 521 U.S. at 617 (quoting Mace v. Van Ru Credit Corp.,

109 F.3d 338, 344 (7th Cir. 1997)). AccordDeBoer v. Mellon Mortgage Co., 64

F.3d 1171, 1175 (8th Cir. 1995) (quoting Wetzel v. Liberty Mut. Ins. Co., 508 F.2d

239, 249 (3d Cir. 1975)) (acknowledging that one of `the purposes behind class

actions is `providing small claimants with a means of obtaining redress for



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claims too small to justify individual litigation.); In re West Virginia Rezulin

Litigation, 585 S.E.2d at 62 (A primary function of the class action is to provide a

mechanism to litigate small damage claims which could not otherwise be

economically litigated.).

Could any individual who had an economic loss of perhaps $500.00 or less

as a result of purchasing a defective drug afford to file a lawsuit against the drug

manufacturer? Could any attorney afford to represent such a client? Obviously,

the answer to these questions is a resounding No!. And, just as obviously, Bayer

Corporation knows this reality or else it would rather entertain Appellants class

action as opposed to facing perhaps thousands of individual lawsuits, as well as the

risk of possible inconsistent judgments on the merits as to their liability.

Unfortunately, this is the reality that the Appellants, as well as any potential

members of their proposed class action, now faces. Should the injunction stand,

the damage to them is not only severe but irreparable. Appellants submit that the

irreparable damage caused them and members of their proposed class outweighs

the damage caused Bayer Corporation by the possibility of potential, repetitious

lawsuits.



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XI. CONCLUSION

For all of the foregoing reason, Appellants pray that Your Honorable Court

reverse the District Courts Order of December 9, 2008, and dissolve the injunction

imposed therein.

KEITH SMITH andSHIRLEY SPERLAZZA

By Counsel

Marvin W. Masters, EsquireRichard A. Monahan, EsquireCharles M. Love, IV, EsquireThe Masters Law Firm lc181 Summers StreetCharleston, West Virginia 25301(304) 342-3106Counsel for Keith Smith and Shirley SperlazzaF:\4\126\B004.doc



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CIRCUIT RULE 28A(d) CERTIFICATION

The undersigned hereby certifies that I have filed electronically, pursuant to

Circuit Rule 28A(d), a version of the brief in non-scanned PDF format. I hereby

certify that the file copied to the CD-ROM has been scanned for viruses and that it

is virus-free.

Dated:



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CERTIFICATE OF COMPLIANCE WITH TYPE-VOLUME

LIMITATION, TYPEFACE REQUIREMENTS,

AND TYPE STYLE REQUIREMENTS

This brief complies with the type-volume limitation of Fed. R. App. P.

32(a)(7)(B) because this brief contains 9,804 words, excluding the parts of the

brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii). This brief complies with the

typeface requirements of Fed. R. App. P. 32(a)(5) and the type style requirements

of Fed. R. App. P. 32(a)(6) because this brief has been prepared in a proportionally

spaced typeface using Microsoft Word 2000 in 14 point Times New Roman font.

Dated:



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NOTICE OF FILING and PROOF OF SERVICE

The undersigned, being first duly sworn, deposes and states that he sent for

filing to the United States Court of Appeals for the Eighth Circuit via Federal

Express overnight delivery 1 original, 9 copies, 1 pdf on CD of the Brief of

Appellants and 3 copies of the Separate Appendix on the 3 rd day of March, 2009.

Two copies and 1 pdf on CD of the Brief of Appellants and 1 copy of the Separate

Appendix were served upon the below-listed counsel of record by first-class mail,

proper postage prepaid by depositing the same in the United States Mail at

Chicago, Illinois on the 3rd day of March, 2009:

SEE ATTACHED SERVICE LIST

Subscribed and sworn to before methis 3rd day of March, 2009.

Notary Public



48/48

SERVICE LIST

Elizabeth S. Wright, Esq.Peter W. Sipkins, Esq.Dorsey & Whitney LLP50 South 6th Street, Suite 1500Minneapolis, Minnesota 55402-1498

Catherine Valerio Barrad, Esq.Sidley & Austin555 Fifth Street, WestSuite 4000Los Angeles, California 90013-1010

Scott A. Smith, Esq.Tracy Joan Van Steenburgh, Esq.Halleland Lewis Nilan & Johnson PA220 South 6th Street, Suite 600Minneapolis, Minnesota 55402-4501

Richard K. DandreaEckert & Seamans600 Grant Street44th FloorPittsburgh, Pennsylvania 15219

Fred T. Magaziner, Esq.Dechert Price & Rhoads1717 Arch Street, 40th FloorPhiladelphia, Pennsylvania 19103-2793

Douglas R. Marvin, Esq.Williams & Connolly725 12th Street, NorthwestWashington, DC 20005

Philip S. Beck, Esq.Adam Hoeflich, Esq.Bartlit Beck HermanPalenchar & Scott LLP54 West Hubbard Street, Suite 300Chicago, Illinois 60610

Michael J. Farrell, Esq.Eric W. Legg, Esq.Tamela J. White, Esq.Farrell & FarrellPost Office Box 6457Huntington, West Virginia 25772-6457

Susan A. Weber, Esq.Sidley & Austin1 South DearbornSuite 2800Chicago, Illinois 60603

Robert A. Limbacher, Esq.Hope S. Freiwald, Esq.Dechert Law Firm2929 Arch StreetCira CentrePhiladelphia, Pennsylvania 19104-2808

Paul John Zidlicky, Esq.Sidley & Austin1501 K Street, NorthwestWashington DC 20005


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