OCTOBER TERM, 1993
Syllabus
TICOR TITLE INSURANCE CO. ET AL. v.
BROWN ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH
CIRCUIT
No. 92-1988. Argued March 1, 1994-Decided April 4, 1994
Respondents were members of a class whose money damages claims
were settled in a suit filed against petitioner title insurance
companies. The class was certified under Federal Rules of Civil
Procedure 23(b)(1)(A) and (b)(2), which do not permit class members
to opt out of a class. When respondent Brown subsequently filed the
present action on behalf of Arizona and Wisconsin title insurance
consumers, the District Court granted petitioners summary judgment
on the ground that respondents were bound by the earlier judgment.
The Ninth Circuit reversed, holding that it would violate due
process to accord res judicata effect to a judgment involving money
damages claims where a plaintiff to the previous suit had not been
afforded a right to opt out.
Held: Because deciding this case would require the Court to
resolve a constitutional question that may be entirely
hypothetical, the writ is dismissed as improvidently granted. The
Court would not have to reach the question whether absent class
members have a constitutional right to opt out of actions involving
money damages if it turned out that classes in such actions can be
certified only under Rule 23(b)(3), which permits opt out. However,
the determination that respondents' class fit within Rules
23(b)(1)(A) and (b)(2) is conclusive upon these parties, and the
alternative of using the Federal Rules instead of the Constitution
as a means of imposing an opt-out requirement on this settlement is
no longer available. Further, it is not clear that our resolution
of the constitutional question will make any difference even to
these litigants.
Certiorari dismissed. Reported below:
982
F.2d 386.
Richard G. Taranto argued the cause for petitioners.
With him on the briefs were Joel 1. Klein, Frank D. Tatum, Jr.,
Paul
J. Laveroni, John C. Christie, Jr., Patrick
J.
Roach, John F. Graybeal, Robert H. Tiller, and David M. Foster.
118
Per Curiam
Gerald D. W North argued the cause for respondents.
With him on the brief were Ted M. Warshafsky, Aram A. Hartunian,
and Ronald L. Futterman.
*
PER CURIAM.
For the reasons discussed below, we have concluded that deciding
this case would require us to resolve a constitutional question
that may be entirely hypothetical, and we accordingly dismiss the
writ as improvidently granted.
I
In 1985, the Federal Trade Commission initiated enforcement
proceedings against petitioners, six title insurance companies,
alleging that they conspired to fix prices in 13 States including
Arizona and Wisconsin. Shortly after that, private parties in the
affected States filed 12 different "tagalong" antitrust class
actions, seeking treble damages and injunctive relief. Those
private suits were consolidated for pretrial purposes pursuant to
28 U. S. C. § 1407 (the federal multidistrict litigation statute),
and were transferred to the
*Briefs of amici curiae urging reversal were filed for the
American Insurance Association et al. by Herbert M. Wachtell,
Douglas S. Liebhafsky, Stuart Philip Ross, Sean M. Hanifin, Merril
J. Hirsh, Craig A. Berrington, Paul
J. Bschorr,
Richard W Reinthaler, and Rebecca L. Ford; for the Lawyer's
Committee for Civil Rights Under Law by Michael A. Cooper, Herbert
J. Hansell, Thomas
J. Henderson, Richard T. Seymour,
Sharon R. Vinick, Edward Labaton, and Bernard Persky; and for the
National Football League by Frank Rothman, William L. Daly, Herbert
Dym, and Gregg H. Levy.
Briefs of amici curiae urging affirmance were filed for the
Association of Trial Lawyers of America by Jeffrey Robert White,
James E. Rooks, Jr., and Barry
J. Nace; for Owens-Illinois,
Inc., by James Dabney Miller and David L. Gray; for Public Citizen
by Alan B. Morrison and Brian Wolfman; for Trial Lawyers for Public
Justice by Roberta B. Walburn, Arthur H. Bryant, and Leslie A.
Brueckner; for James Menendez et al. by Brent M. Rosenthal; and for
Leslie O'Neal et al. by Don Howarth and Suzelle M. Smith.
119
District Court for the Eastern District of Pennsylvania as MDL
No. 633.
In January 1986, spurred on by an intervening decision of this
Court that substantially weakened the claims against petitioners,
see Southern Motor Carriers Rate Conference, Inc. v. United States,
471 U. S. 48
(1985), petitioners and the class representatives in MDL No. 633
reached a settlement. The settlement extinguished all money damages
claims against petitioners by those "'purchasers and insureds, who
purchased or received title insurance ... from any title insurance
underwriter ... with respect to real estate located in any of the
thirteen Affected States during the period from January 1, 1981 to
December 31, 1985,'" a class that included the respondents. In re
Real Estate Title and Settlement Services Antitrust Litigation,
1986-1 Trade Cases' 67,149, pp. 62,921, 62,924 (ED Pa. 1986)
(quoting settlement agreement). To the plaintiffs, the settlement
agreement awarded injunctive relief, an increased amount of
coverage on any title insurance policy that class members bought
during the class period, an increased amount of coverage on
specified title insurance policies that class members might
purchase from petitioners during a future i-year period, and
payment of attorney's fees and costs of the lawsuit. The District
Court provisionally certified the settlement class (as stipulated
by the class representatives and petitioners) under Federal Rules
of Civil Procedure 23(b)(1) and (b)(2), and provisionally accepted
the settlement.
At the ensuing final settlement hearing, the State of Wisconsin
objected to the proposed settlement both as a class member and as
parens patriae for its resident class members, claiming that the
action could not be certified under Rule 23(b)(2) because the
relief sought in the complaints was primarily monetary. Wisconsin
also claimed (and was joined in this by the State of Arizona, both
as a class member and as parens patriae) that due process required
that the proposed class members have an opportunity to opt out of
the
120
Per Curiam
class. The District Court ultimately rejected these objections,
certified the classes under Rules 23(b)(1)(A) and (b)(2), * and
accepted the settlement. The Third Circuit affirmed without
opinion, In re Real Estate Title and Settlement Services Antitrust
Litigation,
815 F.2d
695 (1987) (judgment order), and we denied certiorari,
485 U. S. 909 (1988).
In 1990, respondent Brown filed the present action in District
Court in Arizona on behalf of Arizona and Wisconsin title insurance
consumers, alleging that petitioners had conspired to fix rates for
title-search services in those States in violation of the federal
antitrust laws. The District Court granted petitioners summary
judgment on the ground, among others, that respondents, as parties
to the MDL No. 633 suit, were bound by the judgment entered
pursuant to the settlement. The Ninth Circuit reversed, accepting
respondents' contention that it would violate due process to accord
res judicata effect to a judgment in a class action that involved
money damages claims (or perhaps that involved primarily money
damages claims) against a plaintiff in the previous suit who had
not been afforded a right to opt out on those claims.
982 F.2d
386, 392 (1992). Before the Ninth Circuit, respondents did not
(and indeed could not) challenge whether the class in the MDL No.
633 litigation was properly certified under Rules 23(b)(1)(A) and
(b)(2). And in this Court, petitioners present only a single
question-viz., "[w]hether a federal court may refuse to enforce a
prior federal class action judgment, properly certified under Rule
23,
*Certification under Rule 23(b)(1)(A) requires that the
prosecution of separate actions would create a risk of
"inconsistent or varying adjudications with respect to individual
members of the class which would establish incompatible standards
of conduct for the party opposing the class." Certification under
Rule 23(b)(2) requires that "the party opposing the class has acted
or refused to act on grounds generally applicable to the class,
thereby making appropriate final injunctive relief or corresponding
declaratory relief with respect to the class as a whole."
121
on grounds that absent class members have a constitutional due
process right to opt out of any class action which asserts monetary
claims on their behalf." Pet. for Cert. i.
II
That certified question is of no general consequence if, whether
or not absent class members have a constitutional right to opt out
of such actions, they have a right to do so under the Federal Rules
of Civil Procedure. Such a right would exist if, in actions seeking
monetary damages, classes can be certified only under Rule
23(b)(3), which permits optout, and not under Rules 23(b)(1) and
(b)(2), which do not. See Rules 23(c)(2) and (c)(3). That is at
least a substantial possibility-and we would normally resolve that
preliminary nonconstitutional question before proceeding to the
constitutional claim. See New York City Transit Authority v.
Beazer,
440 U. S.
568, 582-583 (1979). The law of res judicata, however, prevents
that question from being litigated here. It was conclusively
determined in the MDL No. 633 litigation that respondents' class
fit within Rules 23(b)(1)(A) and (b)(2); even though that
determination may have been wrong, it is conclusive upon these
parties, and the alternative of using the Federal Rules instead of
the Constitution as the means of imposing an opt-out requirement
for this settlement is no longer available.
The most obvious consequence of this unavailability is, as we
have suggested, that our resolution of the posited constitutional
question may be quite unnecessary in law, and of virtually no
practical consequence in fact, except with respect to these
particular litigants. Another consequence, less apparent, is that
resolving the constitutional question on the assumption of proper
certification under the Rules may lead us to the wrong result. If
the Federal Rules, which generally are not affirmatively enacted
into law by Congress, see 28 U. S. C. §§ 2072(a), (b), 2074(a), are
not entitled to that great deference as to constitutionality which
we accord fed-
122
eral statutes, see, e. g., Rostker v. Goldberg,
453 U. S. 57, 64 (1981);
Walters v. National Assn. of Radiation Survivors,
473 U. S. 305, 319-320
(1985), they at least come with the imprimatur of the rulemaking
authority of this Court. In deciding the present case, we must
assume either that the lack of opt-out opportunity in these
circumstances was decreed by the Rules or that it was not (though
the parties are bound by an erroneous holding that it was). If we
make the former assumption we may approve, in the mistaken
deference to prior Supreme Court action and congressional
acquiescence, action that neither we nor Congress would
independently think constitutional. If we make the latter
assumption, we may announce a constitutional rule that is good for
no other federal class action. Neither option is attractive.
The one reason to proceed is to achieve justice in this
particular case. Even if the constitutional question presented is
hypothetical as to everyone else, it would seem to be of great
practical importance to these litigants. But that is ordinarily not
sufficient reason for our granting certiorarieven when unnecessary
constitutional pronouncements are not in the picture. Moreover, as
matters have developed it is not clear that our resolution of the
constitutional question will make any difference even to these
litigants. On the day we granted certiorari we were informed that
the parties had reached a settlement designed to moot the petition,
which now awaits the approval of the District Court.
In these circumstances, we think it best to dismiss the writ as
improvidently granted.
JUSTICE O'CONNOR, with whom THE CHIEF JUSTICE and JUSTICE
KENNEDY join, dissenting.
We granted certiorari to consider one specific question:
"Whether a federal court may refuse to enforce a prior federal
class action judgment, properly certified under Rule 23, on grounds
that absent class members have a constitutional
123
due process right to opt out of any class action which asserts
monetary claims on their behalf." Pet. for Cert. i. The Court
decides not to answer this question based on its speculation about
a nonconstitutional ground for decision that is neither presented
on this record nor available to these parties. From that decision I
respectfully dissent.
Respondents are members of a class that reached a final
settlement with petitioners in an antitrust action styled MDL No.
633. In re Real Estate Title and Settlement Services Antitrust
Litigation, 1986-1 Trade Cases' 67,149, p. 62,921 (ED Pa. 1986),
aff'd,
815 F.2d
695 (CA3 1987), cert. denied,
485 U. S. 909 (1988).
Respondents subsequently brought this action against petitioners,
asserting some of the same claims. The District Court held that
respondents had been adequately represented in the MDL No. 633
action, and granted summary judgment for petitioners because, given
the identity of parties and claims, the MDL No. 633 settlement was
res judicata. App. to Pet. for Cert. 20a-28a. The Court of Appeals
for the Ninth Circuit reversed.
982 F.2d
386 (1992). The court agreed that respondents had been
adequately represented in the MDL No. 633 action,
id., at
390391, but held that respondents could nevertheless relitigate the
same claims against petitioners: "Because [respondents] had no
opportunity to opt out of the MDL No. 633 litigation, we hold there
would be a violation of minimal due process if [respondents']
damage claims were held barred by res judicata." Id., at 392.
The Court concludes that the correctness of the Ninth Circuit's
constitutional interpretation "is of no general consequence if, ...
in actions seeking monetary damages, classes can be certified only
under Rule 23(b)(3), which permits optout, and not under Rules
23(b)(1) and (b)(2), which do not." Ante, at 121. In other words,
the Court declines to answer the constitutional question because
the MDL No. 633 action might not have been properly certified-an
issue that was litigated to a final determination in petitioners'
favor more
124
than five years ago, and on which we denied certiorari. The
nonconstitutional ground for decision about which the Court
speculates is therefore unavailable to respondents. The
constitutional ground on which the Court of Appeals relied, the one
we granted certiorari to review and the parties have briefed and
argued, was necessary to the decision in this case. Our prudential
rule of avoiding constitutional questions has no application in
these circumstances, and the Court errs in relying on it.
The Court's assertion that "our resolution of the posited
constitutional question may be ... of virtually no practical
consequence in fact,"
ibid., is unsound. The lower courts
have consistently held that the presence of monetary damages claims
does not preclude class certification under Rules 23(b)(1)(A) and
(b)(2). See 7 A C. Wright, A. Miller, & M. Kane, Federal
Practice and Procedure, Civil 2d § 1775, pp. 463-470 (1986 and
Supp. 1992). Whether or not those decisions are correct (a question
we need not, and indeed should not, decide today), they at least
indicate that there are a substantial number of class members in
exactly the same position as respondents. Under the Ninth Circuit's
rationale in this case, every one of them has the right to go into
federal court and relitigate their claims against the defendants in
the original action. The individuals, corporations, and governments
that have successfully defended against class actions or reached
appropriate settlements, but are now subject to relitigation of the
same claims with individual class members, will rightly dispute the
Court's characterization of the constitutional rule in this case as
inconsequential.
The Court is likewise incorrect in suggesting that a decision in
this case "may be quite unnecessary in law." Ante, at 121. Unless
and until a contrary rule is adopted, courts will continue to
certify classes under Rules 23(b)(1) and (b)(2) notwithstanding the
presence of damages claims; the constitutional opt-out right
announced by the court below will be
125
implicated in every such action, at least in the Ninth Circuit.
Moreover, because the decision below is based on the Due Process
Clause, presumably it applies to the States; although we held in
Phillips Petroleum Co. v. Shutts,
472 U. S. 797 (1985),
that there is a constitutional right to opt out of class actions
brought in state court, that holding was expressly "limited to
those class actions which seek to bind known plaintiffs concerning
claims wholly or predominately for money judgments." Id., at 811,
n. 3. The Ninth Circuit's rule, by contrast, applies whenever
"substantial damage claims" are asserted. See 982 F. 2d, at 392.
The resolution of a constitutional issue with such broad-ranging
consequences is both necessary and appropriate.
Finally, I do not agree with the Court's suggestion that the
posture of the case could "lead us to the wrong result" with
respect to the question whether the Due Process Clause requires an
opt-out right in federal class actions involving claims for money
damages. See ante, at 121-122. As the case comes to us, we must
assume that the MDL No. 633 class was properly certified under Rule
23, notwithstanding the presence of claims for monetary relief. But
this assumption, coupled with whatever presumption of
constitutionality to which the Rules are entitled, will not lead us
to "approve ... action that neither we nor Congress would
independently think constitutional." Ante, at 122. Either an
opt-out right is constitutionally required, or it is not. We can
decide this issue while reserving the question of how the Rules
should be construed. While it might be convenient, and it would
certainly accord with our usual practice, to decide the
nonconstitutional question first, that option is not available to
us in this case. The only question, then, is whether we should
dismiss the writ as improvidently granted. In my view, the
importance of the constitutional question, as well as the
significant expenditures of resources by the litigants, amici, and
this Court, outweighs the prudential concerns on which the Court
relies.
126
When a constitutional issue is fairly joined, necessary to the
decision, and important enough to warrant review, this Court should
not avoid resolving it-particularly on the basis of an entirely
speculative alternative ground for decision that is neither
presented by the record nor available to the parties before the
Court. The decision below rests exclusively on a constitutional
right to opt out of class actions asserting claims for monetary
relief. We granted certiorari to consider whether such a right
exists. The issue has been thoroughly briefed and argued by the
parties. We should decide it.
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