In Re Diet Drugs (Phentermine/Fenfluramine/Dexfenfluramine) Products Liability Litigation ( 2013 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 12-3138
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IN RE: DIET DRUGS (PHENTERMINE/FENFLURAMINE/DEXFENFLURAMINE)
PRODUCTS LIABITY LITIGATION
Roberta Haberman,
Appellant
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Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil Action Nos. 2-99-cv-20593/ 2-12-MD-01203)
District Judge: Honorable Harvey Bartle, III
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Argued March 5, 2013
Before: RENDELL, AMBRO, and VANASKIE, Circuit Judges
(Opinion filed: May 21, 2013)
Howard J. Bashman, Esquire
Suite G-22
2300 Computer Avenue
Willow Grove, PA 19090
Stanley D. Hudson, Esquire
Kip A. Petroff, Esquire (Argued)
Petroff & Associates
3838 Oak Lawn Avenue, Suite 1620
Dallas, TX 75219
Counsel for Appellant
Geoffrey J. Michael, Esquire
Arnold & Porter
555 Twelfth Street, N.W.
Washington, DC 20004
Raymond M. Williams, Esquire
DLA Piper
1650 Market Street
One Liberty Place, Suite 4900
Philadelphia, PA 19103
Jules S. Henshell, Esquire (Argued)
Semanoff, Ormsby, Greenberg & Torchia
2617 Huntingdon Pike
Huntingdon Valley, PA 19006
Laurence S. Berman, Esquire
Michael D. Fishbein, Esquire
Arnold Levin, Esquire
Levin, Fishbein, Sedran & Berman
510 Walnut Street, Suite 500
Philadelphia, PA 19106
Charles R. Parker, Esquire
Yetter & Coleman
909 Fannin Street, Suite 3600
Houston, TX 77010
Counsel for Appellees
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OPINION
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AMBRO, Circuit Judge
In November 1999, Wyeth L.L.C. (―Wyeth‖) entered into a nationwide class
action settlement agreement (the ―Settlement Agreement‖) related to its marketing of two
weight-loss agents, fenfluramine/phentermine (known as ―fen-phen‖) and
dexfenfluramine, linked to the development of valvular heart disease. When a patient
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suffers from this condition, blood that is supposed to move in a forward direction through
the heart leaks backward, or regurgitates, through the diseased valve. However, as the
parties acknowledge, other factors can also cause or contribute to the development of this
medical problem; we refer to these as alternative causation factors.
Under the Settlement Agreement, qualifying diet drug users suffering from
valvular heart disease receive compensation based on their age and the severity level of
their medical condition. In general, to qualify for these benefits, a claimant must be
diagnosed as FDA Positive (having a requisite level of valvular regurgitation).
The Settlement Agreement has two payment matrices—Matrix A (which provides
greater compensation) and Matrix B (which provides lesser compensation)—that are used
to calculate the compensation a claimant will receive.1 Matrix A applies to claimants
who ingested diet drugs for fewer than 61 days and do not have any of the alternative
causation factors listed by the Settlement Agreement. Matrix B applies to resolve all
other qualifying claims. Claimants whose valvular heart conditions worsen to a higher
severity level are permitted to file supplemental claims seeking additional benefits.
In 2010, Roberta Haberman—a class member who previously received
compensation under the Settlement Agreement because she suffered from valvular heart
disease2—filed a supplemental claim after undergoing dual heart valve surgery in 2009.
1
Each Matrix has five severity levels and 11 age groups that determine the amount due to
the claimant.
2
In 2004, the Settlement Agreement was amended to establish a streamlined process for
resolving the large number of low-level severity claims that had been filed by putative
class members. The amendment did not use the payment matrices to determine the
amount due to each claimant. Instead, claimants received a pro rata distribution from a
3
In her supplemental claim form, she asserted that she was entitled to Matrix A benefits.
She based this claim for additional compensation on a 2002 echocardiogram showing that
she had valvular heart disease and did not have any of the listed alternative causation
factors. The AHP Settlement Trust (the ―Trust‖), which administers the settlement fund,
rejected her request for Matrix A benefits. It determined that Matrix B applied to her
claims because four echocardiograms performed between 2007 and 2009 showed that she
had developed mitral annular calcification—one of the listed alternative causation
factors—prior to her surgery. The District Court affirmed the Trust‘s determination, and
Haberman subsequently filed this appeal.3 Both the Trust and class counsel have filed
briefs opposing her request for Matrix A benefits.
The question raised on appeal is whether the Settlement Agreement imposes a
time limitation on the medical evidence upon which the Trust may rely in determining
whether a claimant has an alternative causation factor. It is undisputed that FDA Positive
regurgitation, which determines whether a claimant is entitled to Matrix benefits at all,
must be diagnosed by an echocardiogram performed between beginning diet drug use and
the end of the screening period on January 4, 2003. What the parties dispute is whether
newly created fund based on the review of their claims. Haberman was one of the class
members covered by the amendment. She received a distribution of $122,687.57.
3
The District Court had diversity jurisdiction pursuant to 28 U.S.C. § 1332. We have
jurisdiction over this timely filed appeal under 28 U.S.C. § 1291. ―We apply ‗plenary
review to a district court‘s construction of settlement agreements,‘ but we review any
underlying factual findings for clear error.‖ In re Diet Drugs Prod. Liab. Litig., 706 F.3d
217, 223 n.4 (3d Cir. 2013) (quoting Coltec Indus., Inc. v. Hobgood, 280 F.3d 262, 269
(3d Cir. 2002)) (citing In re Cendant Corp. Prides Litig., 233 F.3d 188, 193 (3d Cir.
2000)).
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this same limitation applies to the diagnosis of alternative causation factors. Because the
screening period ended on January 4, 2003, application of this limitation would preclude
the Trust from relying on the echocardiograms performed between 2007 and 2009 to
determine whether Haberman‘s claim should be resolved under Matrix A or Matrix B.
Settlement agreements are interpreted according to ―basic contract principles.‖ In
re Cendant Corp., 233 F.3d at 193. Under Pennsylvania law,4 when a term in an
agreement is clear and unambiguous, its meaning ―must be determined from the four
corners of the contract.‖ Glenn Distribs. Corp. v. Carlisle Plastics, Inc., 297 F.3d 294,
300 (3d Cir. 2002) (citing Steuart v. McChesney, 444 A.2d 659, 661 (Pa. 1982)). In
contrast, ―if the written contract is ambiguous, a court may look to extrinsic evidence to
resolve the ambiguity and determine the intent of the parties.‖ Id. (citing Bohler-
Uddeholm Am., Inc. v. Ellwood Grp., Inc., 247 F.3d 79, 93 (3d Cir. 2001)).
We believe the Settlement Agreement is unambiguous in not placing a time limit
on the medical evidence on which the Trust can base its determination of whether an
alternative causation factor is present. The relevant provision of the Settlement
Agreement states that Matrix B applies to ―Diet Drug Recipients who ingested [diet
drugs] for sixty-one (61) or more days, who were diagnosed by a Qualified Physician as
FDA Positive by an Echocardiogram performed between the commencement of Diet
Drug use and the end of the Screening Period, with any of the following conditions.‖ J.A.
4
The parties do not address what jurisdiction‘s law is applicable. We have previously
applied Pennsylvania law in interpreting the Diet Drugs settlement. See In re Diet
Drugs., 706 F.3d at 223 n.5. We presume that Pennsylvania law applies here as well.
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at 75–77 (emphasis added). It then lists a series of conditions, the alternative causation
factors, among which is mitral annular calcification. Id. at 76.
On its face, the provision refers to ―Diet Drug Recipients‖ who have ―any of the
following conditions.‖ The commas separating ―who who were diagnosed by a Qualified
Physician as FDA Positive by an Echocardiogram performed between the
commencement of Diet Drug use and the end of the Screening Period‖ support this literal
reading. In addition, some of the alternative causation factors contain their own
timeframes that preclude them from being diagnosed by an echocardiogram performed
between the outset of diet drug use and the end of the screening period. One of the
factors listed, for example, is ―FDA Positive regurgitation (confirmed by
Echocardiogram) prior to [diet drug] use for the valve that is the basis of the claim.‖ Id.
at 77. This alternative causation factor must expressly be diagnosed before, not after, the
beginning of diet drug use.5
Haberman‘s argument that the temporal limitation does apply to the diagnosis of
alternative causation factors primarily relies on the rule of the last antecedent. This ―rule
generally holds ‗that qualifying words, phrases, and clauses are to be applied to the words
or phrase immediately preceding and not to others more remote.‘‖ Stepnowski v. C.I.R.,
456 F.3d 320, 324 (3d Cir. 2006) (quoting United States v. Hodge, 321 F.3d 429, 436 (3d
Cir. 2003)). Applying this rule, Haberman argues that ―the phrase with any of the
5
Moreover, at least one other alternative causation factor—a ―[h]istory of daily use of
methysergide or ergotamines for a continuous period of longer than 120 days‖—
presumably cannot be diagnosed by an echocardiogram at all. Id.6
following conditions modifies the immediately preceding phrase who were diagnosed.‖
Appellant‘s Br. at 26–27 (emphases in original).
We do not agree that the last-antecedent rule requires us to adopt this reading of
the provision. The rule of the last antecedent, despite its name, is a guide, not a binding
rule of interpretation. Stepnowski, 456 F.3d at 324. As discussed, applying this
limitation to the diagnosis of all alternative causation factors would be, among other
things, at odds with the literal words as well as the timeframes that the Settlement
Agreement provides for some of those factors.
* * * * *
To summarize, Haberman argues that the Settlement Agreement prohibits the
Trust from relying on four echocardiograms conducted between 2007 and 2009 to
determine whether she was entitled to Matrix A or Matrix B benefits. The Agreement,
however, does not impose that limitation. Accordingly, we affirm the District Court‘s
order denying her challenge to the Trust‘s determination that she is not entitled to Matrix
A benefits.
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