Ticor Title Insurance v. Brown

511 U.S. 117, 114 S. Ct. 1359, 128 L. Ed. 2d 33, 1994 U.S. LEXIS 2660
Supreme Court of the United States·Decided April 4, 1994·No. 92-1988·Published·Cited by 114 cases

Opinions

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 “tag-along” 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 [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 1-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] 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, [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 opt-out, 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.

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Ticor Title Insurance v. Brown, 511 U.S. 117, 114 S. Ct. 1359, 128 L. Ed. 2d 33, 1994 U.S. LEXIS 2660 (1994).

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