Class Actions -- 2017

In re Flonase Antitrust Litigation   (3rd Circuit)

Sovereign immunity and duplicative state government suits

The Manufacturers’ Center for Legal Action filed an amicus brief in the U.S. Court of Appeals for the Third Circuit opposing Louisiana's attempt to file a lawsuit against GSK over Flonase marketing. The state had already received benefits from a separate class action -- in which it was a class member -- and filed this second suit addressing the same issues.

At issue in this appeal was whether the state can be bound by the settlement agreement when it claims sovereign immunity from litigation under the Eleventh Amendment.

The NAM and the Washington Legal Foundation joined in an amicus brief arguing two points: first, the Eleventh Amendment protection is limited to actions filed against the state. In this case, Louisiana was a member of the plaintiff class and the plaintiff in its own separate suit, making sovereign immunity inapplicable. Second, even if Louisiana possessed an Eleventh Amendment right to object to federal jurisdiction as a plaintiff, it was waived. The state did not opt out of the settlement, and received compensation from it.

Unfortunately, the Third Circuit ruled Dec. 22, 2017, that the settlement of the original class action suit did not apply to Louisiana because a court does not have jurisdiction over a state unless the state waives its sovereign immunity under the Eleventh Amendment. The class action settlement was deemed a suit against Louisiana to the extent it sought to prevent the state from suing in its own court. The state did not waive its rights because it did not make a "clear declaration" to that effect -- receiving notice fo the suit and failing to oppose the settlement is not such a declaration.

This result means that broad settlement agreements will not finally settle claims involving state governments unless those states actually agree to them. The ruling will allow more litigation against manufacturers that thought they were resolving all the claims against them in a class action case.

Related Documents:
NAM amicus brief  (November 1, 2016)


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