HUFFMAN et al v. THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
OPINION/ORDER THAT DEFENDANT'S MOTION TO STAY PROCEEDINGS PENDING RESOLUTION OF RULE 23(f) INTERLOCUTORY APPEAL, ECF NO. 176, IS DENIED; AND DEFENDANT'S MOTION IN LIMINE TO PRECLUDE THE OPINIONS AND TESTIMONY OF PLAINTIFFS' EXPERT CHAD STALLER, ECF NO. 166, IS DENIED. SIGNED BY HONORABLE JOSEPH F. LEESON, JR ON 3/12/18. 3/13/18 ENTERED AND COPIES E-MAILED. (ky, )
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF PENNSYLVANIA
CLARK R. HUFFMAN;
PATRICIA L. GRANTHAM;
LINDA M. PACE; and
BRANDI K. WINTERS, individually and
on behalf of a class of all others similarly situated,
THE PRUDENTIAL INSURANCE COMPANY :
OPINION AND ORDER
Defendant’s Motion to Stay Proceedings Pending Resolution of Rule 23(f) Interlocutory
Appeal, ECF No. 176—Denied
Defendant’s Motion in Limine to Preclude the Opinions and Testimony of Plaintiffs’
Expert Chad Staller, ECF No. 166—Denied
Joseph F. Leeson, Jr.
United States District Judge
March 12, 2018
On January 29, 2018, this Court granted in part Plaintiffs’ motion to alter or amend the
Court’s previous denials of class certification and certified a class for purposes of this ERISA
action. 1 ECF No. 175. On February 12, 2018, Defendant The Prudential Insurance Company of
America submitted a petition under Federal Rule of Civil Procedure 23(f) to the United States
Court of Appeals for the Third Circuit seeking interlocutory review of this Court’s decision to
certify the class. See Ex. A to Prudential’s Motion to Stay (“Mot. Stay”), ECF No. 176-1.
Prudential then moved to stay further proceedings in this Court pending the Third Circuit’s
Because it writes for the parties, this Court assumes familiarity with the
underlying facts of this case.
decision with respect to the Rule 23(f) petition. ECF No. 176. Plaintiffs filed a response (“Pls.’
Resp.”), ECF No. 177, and a subsequent notice of supplemental authority, ECF No. 178,
advising this Court that the United States Court of Appeals for the Eleventh Circuit denied a
Rule 23(f) petition to appeal class certification in Owens v. Metro Life Ins. Co., a factually
similar case pending in another district court. 2017 WL 6302384 (N.D. Ga. Sept. 29, 2017),
leave to appeal denied, (11th Cir. Feb. 28, 2018). Prudential filed a reply in support of its
motion. ECF No. 179. For the reasons discussed below, this Court denies Prudential’s motion
and will not stay proceedings. Additionally, because the previously-scheduled trial of the named
Plaintiffs’ claims has been postponed indefinitely following class certification, this Court denies
Prudential’s pending motion in limine, ECF No. 166, as not yet ripe, without prejudice to renew
the motion at a later date.
Motion for Stay
Under Rule 23(f) of the Federal Rules of Civil Procedure, “[a] court of appeals may
permit an appeal from an order granting or denying class certification,” but “[a]n appeal does not
stay proceedings in the district court unless the district judge or the court of appeals so orders.”
Fed. R. Civ. P. 23(f). The Third Circuit has not yet adopted a standard to guide district courts
ruling on motions to stay pending appeals under Rule 23(f). Johnson v. Geico Cas. Co., 269
F.R.D. 406, 411 (D. Del. 2010); see also King Drug Co. of Florence, Inc. v. Cephalon, Inc., No.
2:06-CV-1797, 2015 WL 9244638, at *3 (E.D. Pa. Dec. 17, 2015) (“As best as I can tell, the
Third Circuit has not yet articulated what standard district courts should apply when deciding
motions to stay proceedings pending Rule 23(f) appeals.”). Courts analyzing requests for stays
pending Rule 23(f) petitions generally balance the same four factors they use to determine
whether to issue a preliminary injunction: (1) the likelihood of the movant’s success on the
merits of the Rule 23(f) petition; (2) whether the movant will suffer irreparable harm if the stay
is denied; (3) whether granting a stay will result in even greater harm to the nonmoving party;
and (4) whether the public interest favors a stay. Johnson, 269 F.R.D. at 412 (citing Kos Pharm.,
Inc. v. Andrx Corp., 369 F.3d 700, 708 (3d Cir. 2004)). Like preliminary injunctions, which
courts regard as “extraordinary relief,” stays pending appeals under Rule 23(f) are not granted as
a matter of course. Id. (citing Prado–Steiman ex rel. Prado v. Bush, 221 F.3d 1266, 1273 n.8
(11th Cir. 2000)).
To establish the first factor, the likelihood of success on the merits, a movant must
demonstrate both the likelihood that the Court of Appeals will grant the Rule 23(f) petition and
allow interlocutory appeal and the likelihood that the Court of Appeals will agree with the
movant on the substantive merits. Id. As Plaintiffs point out, the Eleventh Circuit’s recent
decision not to grant the Rule 23(f) petition and allow interlocutory appeal in Owens, a case this
Court has consistently recognized as factually similar to this case, suggests that Prudential will
not succeed on the merits before the Third Circuit. This prediction finds further support in the
Third Circuit’s own standards for granting Rule 23(f) petitions. The Third Circuit considers a
Rule 23(f) petition appropriate in three situations: (1) to address the “possible case-ending effect
of an imprudent class certification decision,” i.e., where the decision is likely dispositive of the
litigation; (2) to correct an erroneous ruling; or (3) where immediate appeal would “facilitate
development of the law on class certification.” Newton v. Merrill Lynch, Pierce, Fenner &
Smith, Inc., 259 F.3d 154, 165 (3d Cir. 2001). This case presents none of these three situations.
Prudential’s interlocutory appeal will not dispose of this litigation: even if the Third Circuit were
to reverse this Court’s decision to certify a class, the named Plaintiffs’ claims would proceed.
Prudential has not shown that this Court’s ruling on class certification was erroneous, but instead
shows only that it disagrees with that ruling, which does not establish likelihood of success on
the merits. See Johnson, 269 F.R.D. at 413 (holding that movant’s disagreement with the
decision to certify a class did not establish likelihood of success on the merits). Nor does
Prudential’s petition present a novel question of law that facilitates the development of the law
on class certification. The alleged “issues of first impression” that Prudential identifies 2 pertain
to this Court’s decision to grant summary judgment— not the decision to certify a class. But a
Court of Appeals reviewing a Rule 23(f) petition considers only whether the certification order
was proper and not any other order, “even where that order has some impact on another portion
of Rule 23.” McKowan Lowe & Co. v. Jasmine, Ltd., 295 F.3d 380, 390 (3d Cir. 2002) (rejecting
argument that “would have us stretch the limits of Rule 23(f) beyond Rule 23 certification
questions”). Prudential raises no novel legal issues with respect to this Court’s decision to
certify the class. Prudential is unlikely to succeed on the merits, so the first factor weighs against
granting a stay. 3
Prudential highlights two questions as issues of first impression: (1) the
interpretation of a provision in an ERISA plan stating that benefits would “normally” be paid in
“one sum,” where the plan sponsor directed settlement by retained asset account and understood
settlement by retained asset account to satisfy the “one sum” provision, and (2) consideration of
whether an insurer was a fiduciary, and breached any fiduciary duty, where a plan sponsor or
beneficiary directed settlement by retained asset account. Mot Stay 4. This Court resolved both
of these issues on summary judgment, not in its certification order.
Previous courts in the Third Circuit have considered data submitted by the parties
showing the statistical likelihood of the Third Circuit granting a Rule 23(f) petition. See King
Drug Co. of Florence, Inc. v. Cephalon, Inc., No. 2:06-CV-1797, 2015 WL 9244638, at *4 (E.D.
Pa. Dec. 17, 2015) (considering statistical evidence submitted by parties). Prudential and the
Plaintiffs both cite a study presenting similar evidence. John H. Beisner et al., Study Reveals US
Courts of Appeal Are Less Receptive to Reviewing Class Certification Rulings (Apr. 29,
2014), http://www.skadden.com/insights/publications/2014/study-reveals-us-courts-of-appealare-less-recepti, Ex. 2 to Pls.’ Resp., ECF No. 177-2. The data cited suggest that Prudential is not
likely to prevail on the merits, because the Third Circuit likely will deny Prudential’s Rule 23(f)
petition: although the Third Circuit is the second-most receptive to granting Rule 23(f) petitions
among the Courts of Appeals, from 2006 to 2013 it granted only 35.8 percent of Rule 23(f)
petitions filed, a decrease from 86 percent from 1998 to 2006. Id.
Prudential argues that it can establish the second factor, irreparable harm, because
without a stay, Prudential will incur the significant costs of conducting class discovery that
would become moot if the Third Circuit reversed the decision to certify the class. Prudential
suggests that class discovery will require reviewing more than a thousand beneficiary forms,
claim files, written correspondence, and potentially audio files, as well as possibly deposing
various beneficiaries. Mot. Stay 11. Courts appear split over whether litigation costs alone
establish irreparable harm; 4 most, however, seem to find that “wasteful, unrecoverable, and
possibly duplicative costs are proper considerations” to be balanced among others. Ewing Indus.
Corp. v. Bob Wines Nursery, Inc., No. 3:13-CV-931-J-39JBT, 2015 WL 12979096, at *3 (M.D.
Fla. Feb. 5, 2015) (citing Renegotiation Bd. v. Bannercraft Clothing Co., 415 U.S. 1, 24 (1974),
for the proposition that “[m]ere litigation expense, even substantial and unrecoupable cost, does
not constitute irreparable injury.” ); see also Gray v. Golden Gate Nat. Recreational Area, No. C
08-00722 EDL, 2011 WL 6934433, at *3 (N.D. Cal. Dec. 29, 2011) (“Although monetary losses
incurred in litigation are generally not considered irreparable harm, ‘[i]f defendants are forced to
incur the expense of litigation before their appeal is heard, the appeal will be moot, and their
right to appeal would be meaningless.’”) (quoting C.B.S. Employees Federal Credit Union v.
Donaldson, Lufkin & Jenrette, 716 F. Supp. 307, 310 (W.D. Tenn. 1989)). Class discovery in
Compare In re Lorazepam & Clorazepate Antitrust Litig., 208 F.R.D. 1, 6
(D.D.C. 2002) (“Defendants do not claim any cognizable prejudice from having to proceed with
discovery; litigation expenses alone do not necessarily qualify as irreparable harm.”) with
Nieberding v. Barrette Outdoor Living, Inc., No. 12-2353-DDC-TJJ, 2014 WL 5817323, at *4
(D. Kan. Nov. 10, 2014) (“Monetary losses that are not recoverable can constitute irreparable
harm.”). In almost any case with a pending interlocutory appeal, denying a stay and continuing
with district court proceedings will present a risk of additional unrecoverable litigation costs;
nevertheless, courts do not grant stays as a matter of course in the Rule 23(f) context. Therefore,
this Court finds cases like In re Lorazepam persuasive and hesitates to find irreparable injury
based on costs alone.
this case may impose substantial costs; however, all the potential class members are beneficiaries
of Prudential plans, so Prudential should already possess all the required records and be able to
identify the class members easily. The second factor therefore weighs moderately in Prudential’s
The third factor, potential harm to the nonmovant, weighs in favor of Plaintiffs. Granting
a stay would prejudice the named Plaintiffs because it would further delay resolution of their
claims, which have been pending for over seven years now. See Johnson, 269 F.R.D. at 413
(finding that stay would prejudice plaintiffs whose case had been pending for four years).
Additionally, no decision by the Third Circuit will resolve the named Plaintiffs’ claims: even if
the Third Circuit reversed the decision to certify the class, the named Plaintiffs’ claims would
proceed to trial as previously planned before this Court granted class certification. See id.
(finding risk of “substantial” prejudice to plaintiffs who would maintain individual causes of
action even if certification reversed).
The fourth factor, the public interest, is neutral. On one hand, public interest favors the
prompt resolution of Plaintiffs’ claims in this over-seven-year-old litigation. But on the other, the
public interest favors the proper resolution of this case, which might benefit from rulings by the
Third Circuit. See In re Lorazepam & Clorazepate Antitrust Litig., 208 F.R.D. 1, 6 (D.D.C.
2002) (finding the public interest factor “unhelpful” where public interest favored both prompt
resolution of litigation and proper resolution of issues that could be affected by decision of Court
In summary, a flexible balancing of the factors considered above reveals that denial of a
stay would not impose irreparable harm as a matter of law and that the balance of harms favors
neither side strongly in this case. Given that granting a stay pending an interlocutory appeal
under Rule 23(f) is an extraordinary remedy, and that Prudential has not demonstrated a strong
likelihood of success on the merits before the Third Circuit, this Court concludes that a stay is
not warranted at this time. Prudential’s motion to stay proceedings is denied.
Prudential’s Motion in Limine
Before this Court certified the subclass and in anticipation of trial, Prudential filed a
motion to preclude the testimony of Chad L. Staller at trial. Because Prudential has submitted a
pending 23(f) petition to the Third Circuit, the parties are just beginning discovery with respect
to the certified class, and trial in this case is postponed indefinitely, Prudential’s motion is not yet
ripe, and this Court will deny it without prejudice and with leave to renew it when trial is
rescheduled, in the event the parties cannot resolve the issues underlying the motion. See
Weintraub v. Bd. of Educ. of City of New York, 489 F. Supp. 2d 209, 222 (E.D.N.Y. 2007)
(denying motions in limine as not yet ripe where trial had to be postponed indefinitely pending
interlocutory appeal of district court order), aff’d sub nom. Weintraub v. Bd. of Educ. of City Sch.
Dist. of City of New York, 593 F.3d 196 (2d Cir. 2010).
ACCORDINGLY, for the reasons stated above, IT IS ORDERED THAT:
Prudential’s Motion to Stay Proceedings Pending Resolution of Rule 23(f)
Interlocutory Appeal, ECF No. 176, is DENIED.
Prudential’s Motion in Limine to Preclude the Opinions and Testimony of
Plaintiffs’ Expert Chad Staller, ECF No. 166, is DENIED without prejudice.
The parties shall submit class notice for approval by this Court within fifteen (15)
days of the date of this Order.
Prudential shall produce the class list within thirty (30) days of the submission
of the class notice for approval.
Plaintiffs shall mail notice to the class within thirty (30) days of this Court’s
approval of the notice.
All potential class members who wish to opt out shall do so within forty-five (45)
days of the mailing of class notice.
The parties shall complete any class-wide discovery within one hundred twenty
(120) days of the date of this Order.
BY THE COURT:
/s/ Joseph F. Leeson, Jr.____________
JOSEPH F. LEESON, JR.
United States District Judge
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