Free Answering Brief in Opposition - District Court of Delaware - Delaware

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LEXSEE ROBERT CONLON, Plaintiff, -against- SEA-LAND SERVICE, INC., in personam, and M.V. SEA-LAND SPIRIT, its engines, boilers, tackle, etc., in rem, Defendants. SEA-LAND SERVICE, INC., Third-Party Plaintiff, -against- UNITOR SHIPS SERVICE, INC., UNITOR SHIPS SERVICE, A.S. and ANSUL FIRE PROTECTION, Third-Party Defendants. 94 Civ. 0609 (KMW) UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK 1995 U.S. Dist. LEXIS 433 January 18, 1995, Decided January 19, 1995, FILED COUNSEL: [*1] For ROGER CONLON, plaintiff: Stephen H. Fields, Fields & Rosen, New York, NY. For SEA-LAND SERVICE, INC., in personam, M.V. SEA-LAND SPIRIT, its engines, boilers, tackle, etc., in rem., defendant: William J. Manning, Jr., Kenny & Sterne, New York, NY. For UNITOR SHIPS SERVICE, INC., third-party defendant: Steven M. Zweig, Damon & Morey, Buffalo, NY. Marylou K. Roshia, Damon & Morey, Buffalo, NY. For ANSUL FIRE PROTECTION, third-party defendant: Saul Wilensky, Lester Schwab Katz & Dwyer, New York, NY. For UNITOR SHIPS SERVICE, INC., cross-claimant, cross-defendant: Steven M. Zweig, Damon & Morey, Buffalo, NY. For ANSUL FIRE PROTECTION, cross-defendant, cross-claimant: Saul Wilensky, Lester Schwab Katz & Dwyer, New York, NY. For M.V. SEA-LAND SPIRIT, counter-defendant: William J. Manning, Jr., Kenny & Sterne, New York, NY. JUDGES: MICHAEL H. DOLINGER, STATES MAGISTRATE JUDGE OPINION BY: MICHAEL H. DOLINGER OPINION UNITED MEMORANDUM & ORDER MICHAEL H. DOLINGER UNITED STATES MAGISTRATE JUDGE: Plaintiff Roger Conlon has sued his former employer, Sea-Land Services, Inc., and its vessel in rem to recover damages for injuries suffered while Conlon was a seaman on the vessel. The accident involved the unplanned release of a large quantity of carbon dioxide into an enclosed area below deck on the M.V. Sea-Land Spirit on September 13, 1992, while the vessel was en route from Japan to California. As a consequence, four crewmen, including plaintiff, lost consciousness. Of the four, three were revived and one died. Plaintiff, who lives in Florida, filed suit in this district against Sea-Land on February 1, 1994. On June 27, 1994, Sea-Land impleaded three entities that were said to have been responsible for any defects in the marine carbon dioxide fire protection system that was the source of the injurious carbon dioxide. Those entities -- known as Unitor Ships Service, Inc., Unitor Ships Service, A.S. and Ansul Fire Protection -- filed answers and crossclaims on July 28, 1994 and August 25, 1994, respectively. On September 23, [*2] 1994, third-party defendant Ansul filed a motion to transfer this case, for the convenience of the parties and witnesses, to the Northern District of California. Ansul also seeks an order consolidating this case with a lawsuit now pending in that district, entitled Ahmed v. Sea-Land Service, Inc., C94 0716. Alternatively, Ansul asks that this court transfer to California so much of this case as concerns liability issues, as Page 1

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distinguished from damages. Defendants and third-party defendant Unitor have belatedly supported Ansul's motion. Plaintiff opposes it. A. Background This lawsuit and the related Ahmed litigation stem from a fatal accident on board the defendant M.V. SeaLand Spirit in September 1992. The ship was based in Long Beach, California, and was, at the time, in the northern Pacific Ocean, en route from Yakamota, Japan to Long Beach, California. (See unsworn Affidavit of Richard Adam Senzer, Esq., dated Sept. 22, 1994, Exh. F). According to the findings of a Coast Guard investigation, an officer of the ship instructed Second Engineer Robert Mahler to perform a test of the vessel's fire warning system. For reasons unknown, Mr. Mahler rigged an apparatus [*3] to the ship's fire protection system that resulted in the discharge of a large quantity of carbon dioxide into the engine room, in which Conlon, Ahmed, Mahler and one other crewmen were located. The four crew members lost consciousness, although ultimately three were revived. The one man who died as a result of the accident was Mr. Ahmed. (Id., Exh. G at 4-5). We are advised that Conlon received brief emergency medical care in San Francisco, but has since been treated for his assertedly continuing injuries near his home in Florida. (Affidavit of John P. James, Esq., sworn to Sept. 30, 1994, at P 13). He ultimately filed suit in February 1994 solely against the vessel in rem and its owner, Sea-Land Service, Inc. He seeks recovery for negligence under the Jones Act, 46 U.S.C. § 688, and also asks for an award of maintenance and cure. In choosing this forum, plaintiff apparently relied on the fact that Sea-Land had its principal place of business in Port Elizabeth, New Jersey and conducts business in the Southern District of New York. (See Complaint at P 1; Answer at P 1). Sea-Land has neither contested venue nor asserted any jurisdictional [*4] defenses. In its original scheduling order, dated June 6, 1994, the District Court directed that additional parties, if any, be joined by June 30, 1994, with discovery to be completed by August 3, 1994 and a joint pre-trial order submitted by August 24, 1994. In August 1994, in the wake of defendants' impleading of Ansul and the Unitor entities, the Court prepared an amended scheduling order, which required the parties to complete discovery by October 3, 1994, and submit a pre-trial order by October 24, 1994. Limited discovery has taken place, including document production, responses to interrogatories, designation of medical experts and physical examinations of plaintiff in New York. (James Aff. at PP 6-10). The par-

ties have apparently not commenced depositions, but have agreed that depositions taken in the California action may be used in this litigation. (See Senzer Aff., Exh. I at 7-8). B. Analysis Ansul presses its motion for a transfer and consolidation on two grounds. First, it notes the pendency of the Ahmed case in the Northern District of California and suggests that since both lawsuits arose from the same incident, consolidation would be desirable to minimize [*5] expenses and avoid the danger of inconsistent results. Second, Ansul argues that most of the evidence and pertinent witnesses are located in or near the Northern District of California, and hence the litigation of this matter in California would be more convenient and efficient. For the reasons that follow, I conclude that Ansul has failed to justify the relief that it seeks. The governing statute, 28 U.S.C. § 1404(a), authorizes transfer "for the convenience of parties and witnesses, in the interest of justice." Determination of such a motion requires "an 'individualized, case-by-case consideration of convenience and fairness.'" Jones v. Weibrecht, 901 F.2d 17, 19 (2d Cir. 1990) (quoting Stewart Org. v. Ricoh Corp., 487 U.S. 22, 29, 101 L. Ed. 2d 22, 108 S. Ct. 2239 (1988); Van Dusen v. Barrack, 376 U.S. 612, 622, 11 L. Ed. 2d 945, 84 S. Ct. 805 (1964)). Among the considerations that the court must look to are the choice of forum made by the plaintiff, although this is of course not dispositive, [*6] see, e.g., Norwood v. Kirkpatrick, 349 U.S. 29, 32, 99 L. Ed. 789, 75 S. Ct. 544 (1955); the location of witnesses and other evidence; and any relevant public policy concerns. See, e.g., Red Bull Assocs. v. Best W. Int'l, Inc., 862 F.2d 963, 967 (2d Cir. 1988); Cento Group, S.P.A. v. Oroamerica, 822 F. Supp. 1058, 1060 (S.D.N.Y. 1993); Don King Prods., Inc. v. Douglas, 735 F. Supp. 522, 533-34 (S.D.N.Y. 1990). The burden is on the moving party to justify the transfer, and he must make a "clear-cut" showing to overcome the weight normally given to the plaintiff's initial choice of forum. See, e.g., Eastern Refractories Co. v. Forty Eight Insulations, Inc., 668 F. Supp. 183, 187 (S.D.N.Y. 1987) (citing Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508, 91 L. Ed. 1055, 67 S. Ct. 839 (1947)); United States Barite Corp. v. M.V. Haris, 534 F. Supp. 328, 330-31 (S.D.N.Y. 1982). See also A. Olinick & Sons v. Dempster Bros., Inc., 365 F.2d 439, 444-45 (2d Cir. 1966). [*7] Moreover, if the movant relies on a claim of witness convenience -- as is the case here -- "he must clearly specify the key witnesses to be called and must make a general statement of what their testimony will cover." Factors Etc., Inc. v. ProArts, Inc., 579 F.2d 215, 218 (2d Cir. 1978), cert. denied, 440 U.S. 908, 59 L. Ed. Page 2

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2d 455, 99 S. Ct. 1215 (1979). But cf. Piper Aircraft Co. v. Reyno, 454 U.S. 235, 258, 70 L. Ed. 2d 419, 102 S. Ct. 252 (1981). Ansul seeks the transfer of the entire case, including plaintiff's claims against Sea-Land as well as Sea-Land's third-party claims and the resultant cross-claims of Ansul and the Unitor entities. As noted, the motion is premised on the pendency of the Ahmed case and the asserted location of witnesses and other evidence. We start with the fact of plaintiff's choice of forum, which is entitled to some presumptive weight. In attacking that choice, Ansul argues that it is not entitled to any deference because this district has no link to the events at issue. According to the movant, [*8] the absence of any such ties demonstrates that plaintiff is engaged in forumshopping, which is said to be inconsistent with public policy and otherwise frowned upon. There is no dispute that plaintiff does not reside in this district and that none of the pre-suit events pertinent to this action took place here. That fact does not, however, demonstrate that plaintiff's filing of this suit in this district should be deemed unworthy of any weight in our analysis. Plaintiff resides on the East Coast, in Florida, and Sea-Land is doing business in this district. These two facts suggest that plaintiff sensibly chose to serve his own convenience by filing suit here rather than in California. Forum-shopping in this sense is of course a common occurrence and entirely permissible, particularly in Jones Act cases. See, e.g., Babbidge v. Apex Oil Co., 676 F. Supp. 517, 519 (S.D.N.Y. 1987) (citing, inter alia Lykes Bros. Steamship Co. v. Sugarman, 272 F.2d 679, 681 (2d Cir. 1959)). The fact that Sea-Land itself waived any venue objections and thus chose in effect to consent to litigate here until Ansul, as a third-party defendant, objected [*9] to this forum underscores the fact that there is nothing unfair in plaintiff's decision to proceed here with his claims. Indeed, even if plaintiff had made some calculation that the courts in this district might be more receptive to his claims than would a court in the home state of the Unitor third-party defendants -- an unlikely surmise since plaintiff did not sue the third-party defendants -- this too would not raise the spectre of impermissible forumshopping. There is nothing per se improper in an attorney's choosing between available venues based on his calculation that the selection of one may benefit his client because the courts in that district may be more favorably disposed to his legal theory. As former Judge Sofaer has noted: Forum shopping is no more an evil than any other tactical determination a party

makes in its behalf. Any competent lawyer chooses a forum with his or her client's interest in mind. This is undoubtedly why Justice Jackson [in Gulf Oil v. Gilbert] made clear that a party had to do more than forum shop to justify invoking forum non conveniens; the choice of forum must have been made "with some harassment" in mind to have justified dismissal [*10] of the action. Cheeseman v. Carey, 485 F. Supp. 203, 215 (S.D.N.Y.) (citing Gulf Oil Corp. v. Gilbert, 330 U.S. at 507), remanded on other grounds, 623 F.2d 1387 (2d Cir. 1980). Ansul makes no showing that plaintiff chose this district for an improper purpose. As noted in Cheeseman, Had plaintiff[] selected this forum to avoid specific precedents in the Northern District, the case for a transfer would have been far stronger. Just as this district's local rules are designed to prevent shopping for individual judges -- and thereby for the application of some anticipated view of the law -- efforts to select one district to avoid or to obtain specific rulings of another district court should be disfavored and discouraged. Id. at 215. As in Cheeseman, however, "no such argument can be made here." Id. There simply has been no suggestion that this court interprets the governing law differently from the Northern District of California, much less that any such difference would be beneficial to plaintiff. Compare, e.g., Schmid Lab., Inc. v. Hartford Accident & Indemnity Co., 654 F. Supp. 734, 736-37 (D.D.C. 1986), [*11] with Cheeseman v. Carey, 485 F. Supp. at 215. Thus, Ansul's case for transfer must depend on a clear showing of convenience or public policy. Its showing in this regard, however, is rather weak. First, the most potent argument for transfer on public policy grounds -- the desirability of litigating the Ahmed and Conlon claims together to avoid duplication of effort and inconsistent results -- has been overtaken by events. We are advised that in late December 1994 the parties in the Ahmed case agreed to settle the plaintiff's claims and left open for trial only the apportionment of responsibility among the defending parties. (E.g., Jan. 10, 1995 letter to the Court from Marylou K. Roshia, Esq.). Moreover, it appears that the remaining litigants have informally agreed that the result of that apportionPage 3

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ment -- which is scheduled for trial in July 1995 -should govern as well the various third-party claims in this case. In the wake of these developments, a transfer of plaintiff's claims to California is unnecessary to ensure consistency of results. 1 1 Under these circumstances, we need not assess plaintiff's counter-argument that since this case was filed approximately one month before Ahmed, any transfer should involve sending the California case here. [*12] In addition, defendants and third-party defendants in this case tell us that they have agreed that the discovery obtained in the California action will be admissible here, a position with which plaintiff apparently agrees. Hence the danger of duplicative discovery also proves to be chimerical. The remaining ground for the proposed transfer is the asserted predominance of witnesses and evidence in and around the Northern District of California. There is less to this argument, however, than meets the eye. Ansul's showing as to the location of witnesses and evidence is fairly threadbare, amounting to little more than a listing of various individuals and physical evidence located in or near the Northern District, but without any real indication of either the need for the testimony and other evidence, or the likelihood of their being more readily available in the Northern District than here. The most glaring example is Ansul's citation of the fact that Mr. Ahmed, now deceased, lived in the Northern District. (Ansul's Memorandum of Law at fifth unnumbered page). Similarly unpersuasive is the fact that medical records of Conlon's initial treatment in San Francisco are located in California. [*13] (Id. at fourth unnumbered page). Ansul does not identify any medical providers located in that district whom it wishes to call, much less indicate what they are expected to testify to. If defendants' intention is simply to offer those records into evidence by stipulation or certification of authenticity, that can be accomplished here as well as in California. The other items in Ansul's list are also unpersuasive. It cites the fact that the Coast Guard conducted a hearing and issued a report concerning the incident at the home port of the Sea-Land Spirit, in Long Beach, California, which is in the Central District of California. (Id.; see Senzer Aff., Exh. G). That report, which may be admissible under Fed. R. Evid. 803(8)(C), see, e.g., Henry v. Daytop Village, Inc., F.3d , 1994 WL 677963, at * 6 (2d Cir. Dec. 1, 1994) (citing Chandler v. Roudebush, 425 U.S. 840, 863 n. 39, 48 L. Ed. 2d 416, 96 S. Ct. 1949 (1976)), may be highly significant with respect to liability, but it is of course as available and admissible in this district as in California. Moreover, if the parties require

the testimony [*14] of the Coast Guard officer who conducted the investigation that led to the hearing and report, the current venue is preferable. He is no longer in California, but rather is stationed in this district. (James Aff. at P 14). The remaining documentary evidence mentioned by Ansul consists of vessel and maintenance records. (Ansul's Memorandum of Law at seventh unnumbered page). Again, these documents can obviously be made available here without difficulty. Ansul also refers to the fact that most of the crew members of the vessel were identified in the ship's papers as residing closer to the Northern District of California than to this district. (See Senzer Aff., Exh. H). The problem is that Ansul does not indicate whether all of these crew members will be needed as witnesses at trial and if so, why. We may assume that likely witnesses will include Ronald Sparkawich, the Chief Engineer, who directed Mr. Mahler to run the test (id., Exh. G at 4); Mahler, who set up the apparatus that apparently initiated the release of carbon dioxide; Cadet Nathan Hodges, who participated in the rescue of the stricken shipmates (James Aff. at P 11); Mr. Conlon and possibly the fourth injured crewman, [*15] Mr. Mohammed. Ansul also mentions the ship's master, Jerome Sawyer. (Ansul's Memorandum of Law at fifth unnumbered page) Of these potential witnesses, Mr. Mohammed apparently resides in the Northern District of California, but it is open to question whether he has anything significant to say. Moreover, since he is in the merchant marine, it is quite possible in any event that his testimony would have to be taken by way of deposition since he presumably spends much of his time overseas. See, e.g., Babbidge v. Apex Oil Co., 676 F. Supp. at 519-20. As for the others, the Chief Engineer resides in the State of Washington (Affidavit of William J. Manning, Jr., Esq., sworn to Oct. 6, 1994, P 4 & Exh. A at 112), well beyond trial subpoena range in California, but since he is employed by Sea-Land he will presumably be made available wherever the trial is conducted unless he is at sea. (See Id. at P 4). Mr. Mahler lives in New Hampshire (see Senzer Aff., Exh. H), which is closer to this district than to California, although it is unlikely in any event that he will agree to appear voluntarily at trial. As for Cadet Hodges, he is now studying at the Merchant [*16] Marine Academy, within subpoena range of this district. (James Aff. at P 11). Plaintiff, as noted, resides far closer to this district than to California, although he presumably would be prepared to travel to whatever district hosted the trial. Finally, the ship's master resides in Long Beach, in the Central District of California, and presumably can be made available by Sea-Land wherever a trial is held, if he has pertinent testimony.

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The only other witnesses to whom Ansul refers are Rodney Bradley, of Houston, Texas, who has been designated as an expert by Sea-Land; Jack Goudreau, of Wisconsin, who is employed by Ansul; and Brent Allen, of California, who is employed by Unitor. (Ansul Memorandum of Law at sixth unnumbered page). Since Goudreau and Allen are employed by the third-party defendants, they will presumably be made available, if deemed helpful to their employers' case, and Sea-Land will obviously arrange transportation for its expert. Moreover, both Bradley and Goudreau are somewhat closer to this district than to the Northern District of California. Finally, these three witnesses have apparently been deposed in the Ahmed case, and the transcripts are available for [*17] use in this case. 2 2 Counsel for Sea-Land refers to another potential witness, identified as Philip Cippolini, who resides in Long Beach, California. (See Manning Aff. at P 6). He does not specify what testimony Mr. Cippolini would offer, although he mentions that Cippolini trained Mr. Allen. This marginal showing by Ansul does not justify ordering plaintiff to try his case three thousand miles from his chosen forum and three thousand miles from his home. As noted, a few potentially key witnesses are located in this district or within subpoena range, others will presumably be brought here by the defendants and thirdparty defendants if they believe it to be in their interest to do so, and the others have been or will be deposed. Moreover, most of those identified by Ansul are not subject to subpoena in the Northern District of California or are otherwise likely to be unavailable at the time of trial. Apart from these problems with the rationale for a transfer, it bears noting that plaintiff will be otherwise

[*18] disadvantaged by a transfer. First, as noted, plaintiff lives much closer to this district. Second, he has retained two medical experts in this district who have already examined him. (See James Aff. at P 12). It is hardly reasonable to demand that a seaman plaintiff either transport a medical expert three thousand miles for a trial or hire an additional expert in California. 3 Third, Sea-Land has designated a medical expert in this district, and plaintiff has undergone examination by him. (James Aff. at P 9). If the case is transferred to California, SeaLand would presumably retain different experts, with the likelihood that plaintiff would be directed to undergo still another examination. 3 In this circumstance the location of an expert witness, particularly one retained on behalf of an individual litigant who is unlikely to have substantial funds, may be relevant to the transfer decision. Cf. Babbidge v. Apex Oil Co., 676 F. Supp. at 520 (citing cases). In sum, Ansul has failed [*19] to justify its application for a transfer to the Northern District of California. CONCLUSION For the reasons stated, the motion of third-party defendant Ansul Fire protection is denied. DATED: New York, New York January 18, 1995 SO ORDERED. MICHAEL H. DOLINGER UNITED STATES MAGISTRATE JUDGE

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LEXSEE RICHARD A. CHAVEZ, Plaintiff, vs. BRIAN SUZUKI, individually and doing business as FAMILY DENTISTRY; and DOES 1 THROUGH 10, Inclusive, Defendants. CASE NO. 05cv1569 BTM(BLM) UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF CALIFORNIA 2005 U.S. Dist. LEXIS 40092 November 29, 2005, Decided November 30, 2005, Filed COUNSEL: [*1] For RICHARD A CHAVEZ, plaintiff: Duane H Sceper, Paluso and Sceper, San Diego, CA. For BRIAN SUZUKI, individually dba Family Dentistry, defendant: William A Adams, Norton Adams and Downey, San Diego, CA. JUDGES: HONORABLE BARRY MOSKOWITZ, United States District Judge. OPINION BY: BARRY TED MOSKOWITZ OPINION ORDER DENYING MOTION TO DISMISS Defendant Brian Suzuki dba Family Dentistry ("Suzuki" or "Defendant") has filed a motion to dismiss the Complaint pursuant to Fed. R. Civ. P. 12(b)(1), (3), (6) and 12(h)(3). For the reasons discussed below, Defendant's motion is DENIED. BACKGROUND Plaintiff Richard A. Chavez commenced this action on August 9, 2005. Plaintiff alleges that on or about April 22, 2005 and June 21, 2005, he was denied full and equal access to the facilities owned and/or operated by Defendant. (Complaint, P 11.) The alleged barriers to entry include, but are not limited to, lack of disabled parking spaces or an insufficient number and dimensions of disabled parking spaces and lack of or improper signage for such spaces and an unmarked or inaccessible path of travel. (Id. [*2] ) Plaintiff claims that he intends to visit the Defendant's facility again in the immediate future and believes that the architectural barriers precluding him from full and equal access of the public accommodation will continue to exist at his future visits. (Complaint, P 21.) TED The Complaint asserts the following causes of action: (1) violation of the American With Disabilities Act ("ADA"), 42 U.S.C. §§ 12101, et seq.; (2) violation of California Civil Code §§ 51, 52, 54; (3) violation of California Health & Safety Code § 19955, et seq.; (4) negligence per se; (5) negligence; (6) declaratory relief; and (7) injunctive relief. Plaintiff seeks an injunction, declaratory relief, monetary damages under the California Civil Code §§ 52(a) and 54.3, and attorney's fees and costs. DISCUSSION A. Standing Defendant argues that Plaintiff has failed to state a claim and lacks standing to bring this action because the Complaint (1) fails to establish that Plaintiff ever intended or desired to use Defendant's services; (2) fails to make any allegation of ever personally [*3] experiencing any barrier or discrimination at Defendant's business; and (3) fails to make any allegation of personal knowledge of access barriers at Defendant's business. The Court does not find this argument persuasive. An ADA plaintiff need only state that he is currently deterred from attempting to gain access to a public accommodation to satisfy the standing requirement of a "concrete and particularized" injury. Pickern v. Holiday Quality Foods, Inc., 293 F.3d 1133, 1138 (9th Cir. 2002). In addition, "a disabled individual who is currently deterred from patronizing a public accommodation due to a defendant's failure to comply with the ADA has suffered actual injury.'" Id. Although the Complaint is not detailed, it sufficiently alleges that Plaintiff has been and continues to be deterred from visiting or patronizing Defendant's business because of barriers to full and equal access. (Complaint, PP 11, 21.) In support of its motion to dismiss, Page 2

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Defendant introduces evidence that Suzuki's dental practice is by appointment only and that Plaintiff has never been a patient of Suzuki. (Suzuki Decl., P 3.) However, Plaintiff explains that he "personally visited Dr. [*4] Suzuki's office for the purpose of inquiring about his services, prices and availability as a possible new patient." (Chavez Decl., P 3; see also Complaint, P 8.) When Plaintiff arrived at the premises, he did not observe any disabled parking spaces, any accessible entrance to the facility, or a designated or safe path of travel. (Id.) Because of these barriers, Plaintiff was deterred from entering the business. (Id.) If there were no accessibility barriers, Plaintiff would want to return to inquire about services, prices and availability as a new patient. (Id.) Plaintiff has sufficiently established standing to maintain this action. Accordingly, Defendant's motion to dismiss for lack of standing is denied. If Defendant discovers facts showing that Plaintiff did not suffer an "actual injury" -- e.g., facts establishing that Defendant did not and does not have any real intention of seeking dental services -- Defendant may seek summary judgment based on lack of standing. B. Supplemental Jurisdiction Defendant requests that the Court decline to exercise supplemental jurisdiction over Plaintiff's state law claims. The Court denies Defendant's request. Relying [*5] on several unpublished district court decisions, Defendant argues that this Court should decline to exercise supplemental jurisdiction over Plaintiff's state law claims pursuant to 28 U.S.C. § 1367(c). Defendant contends that (1) the Unruh Act and California Disabled Persons Act ("DPA") claims raise novel or complex issues of state law (§ 1367(c)(1)); (2) the Unruh Act and DPA claims substantially predominate over the ADA claim (§ 1367(c)(2)); and (3) compelling reasons exist for declining jurisdiction (§ 1367(c)(4)). Although the Unruh Act and DPA claims may implicate issues that remain to be resolved under state law - most notably, how to determine "each offense" for purposes of damages -- the Court does not find that these issues are of such complexity or centrality that the Court must surrender jurisdiction. Furthermore, the mere fact that the state claims allow for the recovery of monetary damages, whereas the ADA provides for injunctive relief only, does not compel the conclusion that the state claims "substantially predominate" over the federal claim. Other than the availability of statutory damages under state law, the state and federal claims are [*6] identical. The burdens of proof and standards of liability are the same. Indeed, the Unruh Act and DPA specifically provide that a violation under the ADA also consti-

tutes a violation of the Unruh Act and DPA. Cal. Civ. Code §§ 51(f), 54.1(d). Even assuming that the state claims raise a novel or complex issue of state law and/or substantially predominate over the ADA claim, the Court must determine whether the exercise of its discretion to decline supplemental jurisdiction would comport with the underlying objective of "most sensibly accommodat [ing]" the values of "economy, convenience, fairness, and comity." Executive Software North America, Inc. v. United States District Court for the Central District of California, 24 F.3d 1545, 1557 (9th Cir. 1994) (citations omitted). Here, the Court's exercise of supplemental jurisdiction would best advance economy, convenience, fairness, and comity. The state and federal claims are so intertwined that it makes little sense to decline supplemental jurisdiction. To do so would create the danger of multiple suits, courts rushing to judgment, increased litigation costs, and wasted judicial resources. Defendant [*7] advances as a separate compelling reason for declining supplemental jurisdiction the policy of discouraging forum-shopping. However, if it is otherwise proper for the Court to exercise supplemental jurisdiction, there is nothing wrong with Plaintiff choosing to file suit in federal court because he believes it is more favorable to him. This sort of forum-shopping is commonplace among plaintiffs and removing defendants alike and is not an "exceptional" circumstance giving rise to compelling reasons for declining jurisdiction, as required by section 1367(c)(4). The Court does not find any compelling reasons to exercise its discretion to decline supplemental jurisdiction over the state claims. Therefore, Defendant's motion to dismiss these claims is denied. If, at a future date, the ADA claim is resolved, Defendant may make another motion to dismiss the state law claims. See Schneider v. TRW. Inc., 938 F.2d 986,993 (9th Cir. 1991) (quoting Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 n. 7, 108 S. Ct. 614, 98 L. Ed. 2d 720 (1988)) ("[I] n the usual case in which federal-law claims are eliminated before trial, the balance of factors . . . will point toward declining to exercise [*8] jurisdiction over the remaining state law claims.") CONCLUSION For the reasons discussed above, Defendant's motion to dismiss is DENIED. IT IS SO ORDERED. Dated: November 29, 2005 HONORABLE BARRY TED MOSKOWITZ

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United States District Judge

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LEXSEE Davis International, LLC, et al. v. New Start Group Corp., et al. C.A. No. 1297-N COURT OF CHANCERY OF DELAWARE, NEW CASTLE 2005 Del. Ch. LEXIS 169 October 19, 2005, Submitted October 27, 2005, Decided NOTICE: [*1] THIS OPINION HAS NOT BEEN RELEASED FOR PUBLICATION. UNTIL RELEASED, IT IS SUBJECT TO REVISION OR WITHDRAWAL. SUBSEQUENT HISTORY: Motion denied by Davis Int'l, LLC v. New Start Group Corp., 2006 Del. Ch. LEXIS 150 (Del. Ch., Aug. 22, 2006) COUNSEL: David L. Finger, Esquire, Finger & Slanina, LLC, Wilmington, DE. William M. Lafferty, Esquire, Natalie J. Haskins, Esquire, Morris, Nichols, Arsht & Tunnell, Wilmington, DE. Charles M. Oberly, III, Esquire, Karen V. Sullivan, Esquire, Oberly, Jennings & Rhodunda, P.A., Wilmington, DE. Collins J. Seitz, Jr., Esquire, Kevin F. Brady, Esquire, Connolly, Bove, Lodge & Hutz, Wilmington, DE. Richard I. G. Jones, Esquire, Ashby & Geddes, Wilmington, DE. JUDGES: STEPHEN CHANCELLOR. P. LAMB, VICE I. In December 2000, the plaintiffs brought an action in the U.S. District Court for the Southern District of New York against some of the defendants in this case alleging violations of the Racketeer Influenced and [*2] Corrupt Organizations Act (RICO), 18 U.S.C.S. § 1961, intentional interference with contract, and conversion arising from allegedly illegal takeovers of aluminum and vanadium production facilities located in Western Siberia and the Northern Ural Mountains. 1 On March 27, 2003, Judge John G. Koeltl dismissed the case on forum non conveniens grounds, holding that "Russia is clearly the more convenient forum." 2 This judgment was affirmed on appeal. 3 1 Base Metal Trading v. Russian Aluminum, 253 F. Supp. 2d 681, 683 (S.D.N.Y. 2003). Two of the defendants in this action were initially named as defendants in the prior New York action. 2 Id. at 713. 3 Base Metal Trading Ltd. v. Russian Aluminum, 98 Fed. Appx. 47 (2d Cir. 2004). On November 4, 2004, the plaintiffs filed a new action in this court to take advantage of what they perceived to be a more lenient forum non conveniens standard applied by Delaware [*3] state courts. The plaintiffs brought federal RICO and common law claims of conversion and added defendants Evraz Holdings, UralGorno Metallurgical Company, and Mikhail Nekrich, alleging that the defendants stole their controlling interest in the vanadium ore plant through a criminal scheme. On November 30, 2004, the defendants removed the case to the federal court, pursuant to 28 U.S.C. 1441(b), based on federal question jurisdiction resulting from the plaintiffs' RICO claims. The defendants moved in the District Court to dismiss the complaint on grounds, inter alia, of forum non conveniens and direct estoppel based on Judge Page 2

OPINION BY: STEPHEN P. LAMB OPINION Before the court is the defendants' motion to stay these proceedings pending the resolution of a prior filed case in the U.S. District Court for the District of Delaware. For the reasons set forth herein, the defendants' motion to stay is granted pending the development of the litigation between the parties in the District Court.

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Koeltl's decision and its affirmance. The defendants also moved for an injunction barring the plaintiffs from further litigating this matter in any court in the United States. These motions are currently pending before the Honorable Gregory M. Sleet. The plaintiffs responded to these developments by amending their federal court complaint to exclude the non-federal law claims and by refiling the state law claims in this court on April 26, 2005, adding new claims for aiding and abetting, conversion, and civil conspiracy. 4 On July 5, 2005, the [*4] defendants moved to stay this action pending the outcome of their motions in the District Court. After briefing, this court heard oral arguments on October 19, 2005. 4 In June 2005, the plaintiffs also brought suit on similar allegations in Luxembourg against Evraz Group, a corporation related to Evraz Holdings. II. In addressing a motion to stay a later-filed action pending the outcome of a first-filed foreign action, McWane Cast Iron Pipe Corp. v. McDowell-Wellman Engineering Co. and its progeny provide the appropriate analysis. 5 The plaintiffs, nevertheless, cite to Marks v. Stinson 6 and Gwynedd Properties, Inc. v. Lower Gwynedd Township 7 in their briefs and at oral argument as controlling precedent on this matter. Those cases are concerned with whether a federal court, pursuant to the Younger abstention doctrine, should abstain from litigating the case because of an ongoing state court proceeding and, thus, not relevant to the motion at hand. 8 5 263 A.2d 281 (Del. 1970); Donald J. Wolfe, Jr. and Michael A. Pittenger, CORPORATE AND COMMERCIAL PRACTICE IN THE DELAWARE COURT OF CHANCERY, § 5-1 at 5-2 (2005) (explaining that where a prior-filed action is pending in another jurisdiction, McWane and its progeny mandate the liberal exercise of discretion in favor of a stay). [*5] 6 19 F.3d 873 (3d. Cir. 1994). 7 970 F.2d 1195 (3d. Cir. 1992). 8 The Younger abstention doctrine reflects a strong federal policy against federal court interference with pending state judicial proceedings. A federal court should abstain under Younger when (1) there are ongoing state proceedings that are judicial in nature; (2) the state proceedings

implicate important state interests; and (3) the state proceedings afford an adequate opportunity to raise the federal claims. Younger v. Harris, 401 U.S. 37, 91 S. Ct. 746, 27 L. Ed. 2d 669 (1971). In Gwynedd Properties, the plaintiff landowner brought suit against the defendant township under 42 U.S.C.S. § 1983 alleging that the defendants, acting under color of state law, conspired to deprive it of its constitutional property rights. The district court dismissed the suit, relying on the Younger abstention doctrine, due to the existence of an ongoing state proceeding. The Court of Appeals for the Third Circuit reversed on grounds that the Younger abstention doctrine did not bar the appellant from litigating its claims in both state and federal courts because the claims advanced in the federal court were different than those advanced in the state court and the federal action would not interfere with the ongoing state proceeding. In Marks v. Stinson, the plaintiffs, election officials and candidates, brought suit under the Voting Rights Act and the Civil Rights Act challenging an election on the theory that the defendants conspired to cause illegally obtained absentee ballots to be cast. The Third Circuit affirmed the lower court's decision to refuse to abstain from proceeding due to ongoing state court litigation on grounds that the plaintiff did not seek relief in the federal court that would interfere with the state judicial process. [*6] McWane sets forth the following guidelines: A stay may be warranted . . . by facts and circumstances sufficient to move the discretion of the Court; that such discretion should be exercised freely in favor of the stay when there is a prior action pending elsewhere, in a court capable of doing prompt and complete justice, involving the same parties and the same issues; that, as a general rule, litigation should be confined to the forum in which it was first commenced. 9 In effect, where a party alleges that there is a pending foreign action, the discretion to grant a stay should be freely exercised when (1) there is a first-filed prior pending action, (2) that involves similar parties and issues, and (3) the other court is capable of doing prompt and complete justice. 10 "These concepts are impelled by considerations of comity and the necessities of an orderly and efficient administration of justice." 11 Moreover, if a foreign action is pending, principles of fairness, judicial

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economy, and the possibility of inconsistent results favor the granting of a stay. 12 9 263 A.2d at 283. [*7] 10 Id.; See generally Kurtin v. KRE, LLC, 2005 Del. Ch. LEXIS 70 at *15-17 (Del. Ch. May 16, 2005) for a recent and thorough discussion of the McWane analysis. 11 Supra note 9; Issen & Settler v. GCS Enterprises, Inc., 1981 Del. Ch. LEXIS 615 at *5 (Del. Ch. Dec. 7, 1981) (holding that, in exercising its discretion to stay an action, the court is guided by policy considerations which promote the efficient administration of justice). 12 Harbor Finance Partners v. Sunshine Mining & Refining Co., 1996 Del. Ch. LEXIS 10 at *5 (Del Ch. Feb. 16, 1996) (granting the defendants' motion to stay the Court of Chancery action pending resolution of the claims in the District Court, and holding that Delaware courts should avoid duplicative efforts to conserve limited judicial resources). First, there is no doubt that the action pending in the District Court is the first-filed action. The plaintiffs initially filed that action in this court; however, by choosing to include federal claims in their complaint, they voluntarily subjected [*8] themselves to the possibility of removal under 28 U.S.C. § 1441(b). 13 Instead of moving in the District Court to remand the state claims back to this court, the plaintiffs unilaterally determined to split their claims through the device of amending their federal court complaint to eliminate their state law claims, and refiling those non-removable claims in this court. The plaintiffs' procedural maneuvers, premised on their desire to obtain a different forum non conveniens standard, do not change the fact that the litigation pending in the District Court is the first-filed action. 13 Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, 107 S. Ct. 2425, 96 L. Ed. 2d 318 (U.S. 1987) (explaining that the plaintiff is the master of the claim and may choose to avoid federal jurisdiction by exclusive reliance on state law). Second, it is obvious that the two complaints involve the "same parties and the same issues." 14 "Consistent with the McWane doctrine generally, the same parties, same issues' [*9] analysis focuses on substance over form. The parties and issues need not be identical." 15 Instead, there must be a showing of "substantial or functional identity" between the parties in the cases and the

issues must arise out of a "common nucleus of operative fact." 16 Here, the parties and issues involved in the firstfiled complaint are substantially similar to those involved in this action. 17 Furthermore, it is apparent that the common law claims arising under state law and the RICO violation claims under federal law arise from the same disputed transaction and thus derive from a common nucleus of operative fact. 18 In both cases, the plaintiffs allege that they were wrongfully deprived of their controlling interest in Kachkanarsky GOK, a vanadium plant, through a complex criminal scheme orchestrated by the defendants. 14 McWane, 263 A.2d at 283. 15 Kurtin, 2005 Del. Ch. LEXIS 70 at *15. 16 Id.; Donald J. Wolfe, Jr. and Michael A. Pittenger, CORPORATE AND COMMERCIAL PRACTICE IN THE DELAWARE COURT OF CHANCERY, § 5-1 at 5-17 (2005) ("Although the complete identity of parties and issues can greatly simplify the analysis, complete identity is rare, and an absolute identity of parties and issues is not a necessary prerequisite to a stay of a laterfiled action in favor of a prior pending action. Delaware courts have often granted stays even though the parties and issues involved in the various pending actions were not identical."); Cornerstone Tech., LLC v. Conrad, 2003 Del. Ch. LEXIS 34, at *46-49 (Mar. 31, 2003); In re Westell Techs., Inc. Deriv. Litig., 2001 Del. Ch. LEXIS 161, at *5-6 (June 29, 2001) ("Our cases have consistently held that in determining whether parties, issues, or claims are similar for the purpose of the McWane analysis, substantial or functional identity is sufficient."); USX Corp. v. U.S. Denro Steels, Inc., 2001 Del. Ch. LEXIS 122, at *5-6 (June 29, 2001) (staying the Delaware action in favor of a Texas action involving the same, but not all, identical issues); Harbor Finance Partners, 1996 Del. Ch. LEXIS 10, at *6 ("Delaware law does not require both actions to have identical parties and issues in order to grant a stay."); Zimmerman v. Home Shopping Network, 1989 Del. Ch. LEXIS 101 (Sept. 11, 1989) (according deference to the first-filed Florida action, notwithstanding the lack of complete identity among the parties and issues in the two cases). [*10] 17 The only difference between the parties to this action and the parties to the action pending in the District Court is that Pan-American is not a defendant in this action.

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18 In re Westell Technologies, 2001 Del. Ch. LEXIS 161 at *7 (rejecting the plaintiffs' argument that the issues are not the same because the Delaware plaintiffs are asserting common law breach of fiduciary duty claims, while the federal plaintiffs are asserting claims under the federal securities laws, since they arise out of the same transactional facts); Visual Edge Sys., Inc. v. Takefman, 2000 Del. Ch. LEXIS 24 at *5-6 (Jan. 31, 2000) (noting that the McWane analysis "applies equally to actions involving issues, which, while similar, are not identical to the pending action, provided that the actions arise out of the same set of operative fact."); Jeffreys v. Exten, 1988 Del. Ch. LEXIS 96, at *8 (July 15, 1988) (staying the present action in the Court of Chancery until resolution of the RICO claims brought in the first-filed suit in the District Court). [*11] Third, the District Court is able to render "prompt and complete justice" of the dispute between the parties. 19 Accordingly, based on the foregoing McWane analysis, this litigation will be stayed pending resolution by the District Court. 19 Johnston v. Caremark Rx, Inc., 2000 Del. Ch. LEXIS 46 at *12 (Mar. 28, 2000) (granting a motion to stay the Delaware action and holding that other courts are capable of applying Delaware law). Finally, the court notes that the plaintiffs are engaging in piecemeal litigation and are trying to subvert the removal statute by improperly splitting their claims. 20 It would be a wasteful duplication of time, effort, and expense if the court, at this time, allowed parallel adjudications to proceed simultaneously. 21 Indeed, if the District

Court grants the defendants' pending motion to enjoin the plaintiffs from further litigating this matter, this court could not proceed. In addition, if the federal court denies the defendants' motion to dismiss and [*12] reaches the merits of the plaintiffs' claims, res judicata may apply to bar this action. 22 20 Maldonado v. Flynn, 417 A.2d 378 (Del. Ch. 1980) (finding that the plaintiff impermissibly split his claim and dismissing the subsequently filed state law claims because the plaintiff failed to show that he could not have presented the entire controversy to the district court for its determination). 21 McWane, 263 A.2d at 283. 22 Maldonado, 417 A.2d at 383 ("It is clear that if a plaintiff can present his state claims in a prior federal action by use of pendent jurisdiction and he chooses not to present them in the federal court, the doctrine of res judicata will bar his later assertion of the same claims in a state forum."); Issen & Settler, 1981 Del. Ch. LEXIS 615 at *7 ("Plaintiffs are compelled to assert their state claims in the U.S. District Court or risk the possibility of having them barred by the doctrine of res judicata."). [*13] III. For the reasons set forth above, the defendants' motion to stay is GRANTED. IT IS SO ORDERED. Stephen P. Lamb Vice Chancellor

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LEXSEE NATALIE M. GRIDER, M.D.; KUTZTOWN FAMILY MEDICINE, P.C. v. KEYSTONE HEALTH PLAN CENTRAL, INC.; THOMAS F. BICKMAN; HIGHMARK, INC.; JOHN S. BROUSE; CAPITAL BLUECROSS; JAMES M. MEAD; JOSEPH PFISTER, Keystone Health Plan Central, Inc.; Capital BlueCross; James M. Mead; Joseph Pfister, Appellants, No. 07-1231, Highmark, Inc.; John S. Brouse, Appellants, No. 07-1232, * CROWELL MORING LLP; KATHLEEN TAYLOR SOOY; MICHAEL L. MARTINEZ, Appellants, No. 07-1270 * Pursuant to F.R.A.P. 12(a) Nos. 07-1231, 07-1232 and 07-1270 UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT 2007 U.S. App. LEXIS 20633 June 19, 2007, Argued August 28, 2007, Filed PRIOR HISTORY: [*1] On Appeal from the United States District Court for the Eastern District of Pennsylvania. (D.C. No. 01-cv05641). District Judge: Honorable James Knoll Gardner. Grider v. Keystone Health Plan Cent., Inc., 2006 U.S. Dist. LEXIS 93085 (E.D. Pa., Dec. 21, 2006) Shane v. Humana, Inc., 2007 U.S. App. LEXIS 13813 (11th Cir. Fla., June 13, 2007) COUNSEL: Malcolm J. Gross, Gross, McGinley, LaBarre & Eaton, Allentown, PA; Kathleen T. Sooy (Argued), Clifton S. Elgarten, Tracy A. Roman, Crowell & Moring, Washington, DC, Attorneys for Appellants (No. 07-1231), Keystone Health Plan Central, Inc., Capital BlueCross, James M. Mead and Joseph Pfister. Daniel I. Booker, Donna M. Doblick, James C. Martin (Argued), Reed Smith, Pittsburgh, PA; Sandra A. Girifalco, Stradley, Ronon, Stevens & Young, Philadelphia, PA, Attorneys for Appellants (No. 07-1232), Highmark, Inc. and John S. Brouse. Clifton S. Elgarten, Tracy A. Roman, Crowell & Moring, Washington, DC, Attorneys for Appellants (No. 071270), Crowell Moring LLP, Kathleen Taylor Sooy and Michael L. Martinez. Louis C. Bechtle, Conrad, O'Brien, Gellman & Rohn, Philadelphia, PA; Joseph A. O'Keefe, O'Keefe & Sher, Kutztown, PA; Francis J. Farina, Devon, PA; Kenneth A. Jacobsen (Argued), Wallingford, PA, Attorneys for Appellees, Natalie M. Grider, M.D., and Kutztown Family Medicine, P.C. JUDGES: Before: McKEE, FISHER and CHAGARES, Circuit Judges. OPINION BY: FISHER OPINION OPINION [*2] OF THE COURT FISHER, Circuit Judge. This appeal requires us to explore the limits of the All Writs Act, 28 U.S.C. § 1651(a), as it relates to actions by one federal court that may affect those in a different federal court. Specifically, in this case, Dr. Natalie Grider and Kutztown Family Medicine P.C., representing a class of approximately 6,000 doctors in Central Pennsylvania, filed a suit against Keystone Health Plan Central, Inc. ("Keystone"); Keystone's two former fiftypercent owners, Highmark, Inc. ("Highmark") and Capital Blue Cross ("Capital"); and each company's chief executive officer, Joseph Pfister, John Brouse, and James Mead. The suit alleges that Keystone's claims handling practices violated the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1961 - 1968, and Pennsylvania's "prompt pay" statute, 40 Pa. Stat. §§ 991.2101 - 991.2193. Around that time, similar nationwide claims were consolidated by a Multidistrict Litigation ("MDL") panel in the United States District Court for the Southern District of Florida ("Florida MDL"), which declined to add the Grider case as an tag-along Page 1

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action because it was at a more advanced stage in its proceedings. [*3] Recently, however, as the parties in the Florida MDL moved towards a comprehensive settlement agreement, the United States District Court for the Eastern District of Pennsylvania issued an injunction under the All Writs Act prohibiting the Grider Defendants from settling or attempting to settle claims in the Florida MDL that would have the effect of also settling the claims in Grider. The question presented to us is whether this is a permissible exercise of power under the All Writs Act. For the reasons that follow, we conclude that it is not, and we will therefore vacate the injunction issued by the District Court. I. A. The Grider Case This case involves a certified class of approximately 6,000 doctors in Central Pennsylvania who were providers with the Keystone health maintenance organization ("HMO"), which operates exclusively in Central Pennsylvania. These doctors had signed contracts with Keystone to provide medical services to patients who subscribed to the Keystone HMO. To receive reimbursement for services they provided to subscribers, the doctors submitted claims on forms provided by Keystone, using a standardized set of numerical codes provided by the American Medical Association, [*4] which are referred to as "CPT codes." These codes are provided for virtually every medical procedure in order to avoid variations in descriptions given by doctors. Because each code only represents a single procedure, one visit to a doctor may result in a reimbursement claim containing multiple CPT codes. A typical claim form, for instance, may have one code for the office visit itself, and another for the administration of a particular test. During the class period certified by the District Court, when a doctor within Keystone's network submitted one of these claim forms, it was processed through a company named Synertech, Inc. ("Synertech"). Synertech is located in Central Pennsylvania, and used a proprietary software system owned by Tingley, Inc. to process these claims. In addition to being reimbursed on a fee-for-service basis, many doctors in Keystone's network also received reimbursements for certain pools of patients - usually employees of a large employer - under contractual "capitation" arrangements with Keystone. Approximately 28% of the certified class members in this case are family practice providers, most of whom were under contractual capitation arrangements with Keystone. [*5] Under these capitation agreements, doctors are paid a set monthly fee in exchange for providing basic medical services - such as examinations and treatment for minor

illnesses - to a pool of patients. More complicated medical procedures not on the list of capitation services are supposed to be billed to Keystone and paid on a fee-forservice basis. On October 5, 2001, the Plaintiffs in this case filed an action in Pennsylvania state court, which the Defendants promptly removed to the United States District Court for the Eastern District of Pennsylvania. The suit alleges that Keystone violated RICO by not processing and paying claims as it had promised to do in its contracts and other communications with the doctors in its network. According to the Plaintiffs, Keystone used automated systems and software built into Synertech's computerized claims processing operations to systematically "bundle" two or more CPT codes. By doing so, it would pay for only one procedure, thereby reducing payments to doctors. The Plaintiffs also allege that Keystone used Synertech's software to systematically "downcode" the doctors' claims by automatically changing the CPT code on a claim form to a less costly [*6] procedure. In terms of the capitation agreements, the Plaintiffs allege that Keystone secretly reduced monthly capitation payments to participating doctors. Specifically, they claim that Keystone "shaved" capitation payments by "secretly: 1) shifting patients off of a doctor's capitation roster to so-called 'dummy accounts' set up by Keystone, whereby doctors continued to treat the insured patient and Keystone continued to collect premiums for medical insurance paid by or on behalf of the member, but retained those premiums for itself instead of paying them to the doctor; and 2) delaying capitation payments to providers for newly enrolled members assigned to that doctor's capitation roster." In addition to these claims, the complaint also alleges violations of Pennsylvania's "prompt pay" statute, which requires insurers to reimburse doctors within forty-five days after receiving a reimbursement claim. On December 21, 2006, following three years of discovery, the District Court certified a class of providers in the Keystone network who were alleged to have been defrauded by the practices described in the complaint. The class includes: All medical service providers in connection with medical [*7] services rendered to patients insured by Keystone Health Plan Central Inc. who during the period January 1, 1996 through October 5, 2001: (1) submitted claims for reimbursement on a feefor-service basis for covPage 2

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ered services which claims were denied or reduced through the application of automated edits in the claim processing software used by defendants to process those claims; and/or (2) received less in capitation payments than the provider was entitled through the use and application of automated systems to "shave" capitation payments in the manner alleged in plaintiffs' Amended Complaint filed October 6, 2001.

Keystone Health Plan Central. However, while some of those subsidiaries are specifically listed, Keystone Health Plan Central is not a specifically named defendant. On November 4, 2003, thirteen chiropractic physicians, podiatrists, physical [*9] therapists, and psychologists from Florida, Texas, Oregon, and Arizona filed the action now known as Solomon, No. 03-22935 (S.D. Fla.). The Solomon case involves essentially the same claims as Love. As in Love, both Capital and Highmark are named defendants. Although the complaint purports to include the subsidiaries of all of the named defendants as defendants themselves, it does not specifically list Keystone as a defendant in the case. The Love and Solomon cases are part of the consolidated multidistrict proceedings being conducted in the United States District Court for the Southern District of Florida (MDL No. 1334) pursuant to 28 U.S.C. § 1407. On March 27, 2004, Highmark and Capital filed notice with the Judicial Panel on Multidistrict Litigation pursuant to 28 U.S.C. § 1407(c)(ii) arguing that the Grider case would be appropriate for transfer to the Florida MDL proceedings as a tag-along action. Keystone did not join the motion to transfer. On August 10, 2004, the Chairman of the Judicial Panel on Multidistrict Litigation entered an order denying transfer of the Grider case to the Florida MDL. The order explained that while Grider shares some questions of fact with actions in [*10] this litigation previously centralized in the Southern District of Florida, inclusion of Grider in MDL-1334 proceedings in the Southern District of Florida will not necessarily serve the convenience of the parties and witnesses and promote the just and efficient conduct of this litigation. We point out that Grider is nearly three years old with a discovery cutoff date of less than five months away. Moreover, alternatives to Section 1407 transfer exist that can minimize whatever possibilities there might be of duplicate discovery, inconsistent pretrial rulings, or both. Grider, 2007 WL 201011, *6 (quoting Judicial Panel on Multidistrict Litigation Order Denying Transfer (Aug. 10, 2004)) (internal quotation marks omitted). Accordingly, the Grider case continued to proceed independently of the Florida MDL. C. Grider Injunction Decision

Grider v. Keystone Health Plan Cent., Inc., No. 2001CV-05641, 2007 WL 201011, *2 (E.D. Pa. Jan. 19, 2007). Now that the class is certified, the case appears to be headed towards trial. B. The Love and Solomon Cases in Florida The Grider case was just one of many similar cases that were being filed around the country at the time. On May 22, 2003, three doctors from Alabama, one doctor from Puerto Rico, and the medical societies of South Carolina, Louisiana, Northern Virginia, and Puerto Rico, filed a complaint in the United States District Court for the Southern District of Florida [*8] against sixty-nine separate Blue Cross and Blue Shield companies throughout the United States ("Blues defendants"), and their national trade association, the Blue Cross and Blue Shield Association ("the Association"). Capital and Highmark are among the specifically named defendants, but Keystone is not. 1 The case, which is now known as the Love case (formerly, it was known as Thomas), No. 03-21296 (S.D. Fla.), was eventually assigned to District Judge Federico Moreno. It alleges a national conspiracy among the Blues defendants, with the Association as the "hub," to bundle and downcode claims and to delay payments to providers under contract with the defendant HMOs. 1 Keystone Health Plan East, Inc., which is a wholly owned subsidiary of Independence Blue Cross operating out of the Philadelphia area, is named as a defendant in Love. The complaint also purports to include the subsidiaries of all of the named defendants, which ostensibly would cover

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On November 29, 2006, Highmark's counsel announced that Highmark had joined a "substantial majority" of Blues defendants in Love who had decided to settle that litigation, and that the Grider claims would be released under a broad release negotiated as part of that settlement. However, because of the confidentiality of the pending settlement agreement, Highmark's [*11] counsel would not discuss any details at that time. Plaintiffs' counsel in Love subsequently confirmed that Highmark had agreed to settle the Love litigation, and that the release in Love would also release claims against all present and former subsidiaries of any defendant in Love, which would include Keystone. After learning of this pending settlement agreement, the Plaintiffs in Grider filed a motion for a preliminary injunction against Highmark, Capital, and other codefendants, to enjoin them from settling the Grider claims as part of the Florida Love and Solomon settlements. Subsequently, on January 19, 2007, the United States District Court for the Eastern District of Pennsylvania granted the injunction sought by the Plaintiffs. Its order provides that: IT IS ORDERED that plaintiffs' motion for an injunction is granted. IT IS FURTH[E]R ORDERED that pursuant to the All Writs Act, 28 U.S.C. § 1651(a), the court enjoins defendants Keystone Health Plan Central, Inc.; Highmark, Inc.; John S. Brouse; Capital Blue Cross; James M. Mead; Joseph Pfister; their attorneys, including, but not limited to, Michael L. Martinez, Kimberly J. Krupka, Kathleen Taylor Sooy, Sandra A. Girifalco, Mary [*12] J. Hackett, Steven E. Siff and their respective law firms; and anyone acting [o]n their behalf or in concert with them, from settling, or attempting to settle, the class and subclass claims in, or any part of, the within litigation, which claims the undersigned certified by Order and Opinion dated December 20, 2006, and filed December 21, 2006, and which are pending before this court, in any other forum without the express approval of this court. IT IS FURTHER ORDERED that the aforesaid persons and firms are specifically enjoined from settling, or attempting to settle, the certified class and subclass claims in, or in any part of, the within matter in the multidistrict litigation currently pending before United States District Judge Federico A. Moreno in case

number MDL No. 1334 in the United States District Court [for] the Southern District of Florida, Miami Division, in the cases known as Love, et al. v. Blue Cross and Blue Shield Association, et al., case number 1:03-CV-21296; . . . Solomon, et al. v. Blue Cross and Blue Shield Association, et al., case number 1:03-CV-22935; and any other related case or cases. Grider, 2007 WL 201011, *1. In granting this injunction, the District Court [*13] explained that "[i]n doing so, I am not enjoining Judge Moreno from taking any action in his MDL cases in Florida. Nor am I enjoining any of the parties in the Florida litigation, including Highmark, Inc. and Capital Blue Cross, from settling any of the Florida plaintiffs' claims in the Florida litigation, which in my view are different than the class claims which I certified in this Pennsylvania litigation." Id. at *2. The Court emphasized that the Defendants "will still be able to settle the Love and Solomon claims in Florida." Id. at *25. Indeed, the District Court arrived at this view, in part, based on statements from the Defendants themselves, who had argued at various times earlier in the proceedings that the Grider case was distinct from the Florida MDL. In response to discovery requests regarding the Florida MDL, for example, Capital stated that the MDL "concerns unrelated defendants with different payment policies, different payment practices, and different payment software," and explained that Love and Solomon "do not involve defendant [Keystone Health Plan] Central's HMO." D. Proposed Settlement Agreement Reached in Love On April 27, 2007, after engaging in court-ordered mediation, [*14] the plaintiffs in the Love case announced that they had reached a settlement with a majority of the named defendants. The settlement provides that the settling defendants will pay $ 128.3 million to members of the settlement class and will adopt a range of new policies and procedures concerning their business practices. In exchange, the settling defendants will be released from all causes of action, judgments, and claims of every kind "that were or could have been asserted against any of the Released Parties by reason of, arising out of, or in any way related to" the transactions and conduct giving rise to the settlement agreement. Love v. Blue Cross