ANTI-INJUNCTION ACT

Smith v. Bayer Corp.

Issues 

Whether the Anti-Injunction Act’s relitigation exception allows a federal court to enjoin parties seeking a class certification in state court under state procedural rules when the federal court previously denied certification of a similar class with similar issues under federal procedural rules.

 

Bayer Corporation manufactured and distributed Baycol, a prescription cholesterol medication that was linked to thirty-one deaths. After removing Baycol from the market, Bayer was sued by thousands of individuals. These individual claims, including the claim of an individual seeking economic damages under the West Virginia Consumer Credit and Protection Act, were consolidated for pre-trial motions in the United States District Court for the District of Minnesota. Two other individuals separately sued Bayer under the West Virginia Consumer Credit and Protection Act in West Virginia state court. The federal district court denied class certification of the West Virginia economic damages claim, determining that such claims required individual damages. Bayer moved to enjoin certification of the economic damages claim in West Virginia state court based on the district court's decision. The district court granted the injunction and the Eighth Circuit affirmed, concluding that the claim fit the “relitigation exception” to the Anti-Injunction Act because the decision met the requirements of collateral estoppel. The Supreme Court granted certiorari to determine whether the relitigation exception applies when the parties and issues involved in two actions are not entirely identical and whether a court can have jurisdiction over an absent class member or a nonparty if a class does not actually exist because the court denied certification. This decision may affect the ability of individuals to bring class actions in state court or, alternatively, the ability of defendants in federal class actions to efficiently preclude similar state court claims.

Questions as Framed for the Court by the Parties 

1. Among the elements for the doctrine of collateral estoppel to be used in support of the relitigation exception to the Anti-Injunction Act are requirements that the state parties sought to be estopped are the same parties or in privity with parties to the prior federal litigation and that issues necessary to the resolution of the proceedings are also identical. In determining whether issues are identical, courts have also recognized that state courts should have discretion to apply their own procedural rules in a manner different from their federal counterparts. Can the district court's injunction be affirmed when neither the parties sought to be estopped nor the issues presented are identical? ??

2. It is axiomatic that everyone should have his own day in court and that one is not bound by a judgment in personam in a litigation in which he has not been made a party by designation or service of process. One exception to this rule are absent members of a class in a properly conducted class action because of the due-process protections accorded such absent members once class certification has been granted. Does a district court have personal jurisdiction over absent members of a class for purposes of enjoining them from seeking class certification in state court when a properly conducted class action had never existed before the district court because it had denied class certification and due-process protections had never been afforded the absent members?

From 1997 to 2001, Bayer Corporation ("Bayer") manufactured and distributed Baycol, a prescription medicine designed to lower cholesterol. See Smith v. Bayer, 593 F.3d 716, 719 (8th Cir.

Edited by 

Additional Resources 

· Forbes, Daniel Fisher: Class-Action Foes Have Trifecta Before Supreme Court (Dec. 20, 2010)

· Mass Tort Litigation Blog, Elizabeth Burch: Supreme Court to Hear Case on the Anti-Injunction Act's Relitigation Exception(Oct. 7, 2010)

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