A. The Proposed Settlement Class Must Be Certified as if The Case Were to Be Tried
30. Federal Rule of Civil Procedure 23 allows the Court to certify a class for settlement purposes only. GM Trucks, 55 F.3d at 778. A settlement class is "a device whereby the court postpones the formal certification procedure until the parties have successfully negotiated a settlement, thus allowing a defendant to explore settlement without conceding any of its arguments against certification." Id. at 786. The settlement class is an "extremely valuable" device to dispose of major and complex class actions. See id. Despite the absence of statutory guidance for settlement classes, courts have routinely established temporary classes for settlement purposes only. See id. (gathering authority).
31. In certifying a class for settlement purposes, the Court must abide by the ordinary Rule 23 requirements: "Rule 23 permits courts to achieve the significant benefits created by settlement classes so long as these courts abide by all of the fundaments of the Rule." See id. 55 F.3d at 778 (holding that Rule 23(a) requirements must be satisfied as if class were to litigate its claims); see also Georgine, 83 F.3d 610 at 617 (holding that Rule 23(b) requirements must be satisfied as if class were to litigate its claims). Thus, a settlement class must satisfy the Rule 23(a) requirements of numerosity, commonality, typicality, and adequacy of representation and the Rule 23(b) requirements. See GM Trucks, 55 F.3d at 778. In this case, because the settlement proponents seek to certify the class under Rule 23(b)(3), the class must satisfy this provision's superiority and predominance standards. See id.
32. The Court must consider the propriety of certification as if the case were to go to trial: "Despite the possibility that settlement-only class actions might serve the 'useful purpose of ridding the courts' of the 'albatross' represented by mass tort actions, the rule in this circuit is that settlement class certification is not permissible unless the case would have been 'triable in class form.'" Georgine, 83 F.3d 610 at 625 (citing GM Trucks, 55 F.3d at 799-800). Moreover, the Third Circuit has held that this Court cannot consider the Proposed Settlement's possible amelioration of the Court's manageability concerns. See id. 83 F.3d at 625-26.
33. The Court must enumerate findings of fact to establish each of the Rule 23 requisites. See id. Although the Court may look beyond the pleadings to determine whether a motion for class certification should be granted, the Court should not resolve the merits of the plaintiffs' claims. Kahan v. Rosenstiel, 424 F.2d 161, 169 (3d Cir.), cert. denied, 398 U.S. 950, 26 L. Ed. 2d 290, 90 S. Ct. 1870 (1970) ("whether there is a proper class does not depend on the existence of a cause of action"); Gunter v. Ridgewood Energy Corp., 164 F.R.D. 391 (D.N.J. 1996). In a borderline case, the Court should allow class certification: "the interests of justice require that in a doubtful case . . . any error, if there is to be one, should be committed in favor of allowing a class action." Eisenberg v. Gagnon, 766 F.2d 770, 785 (3d Cir.) (citations omitted), cert. denied, 474 U.S. 946, 88 L. Ed. 2d 290, 106 S. Ct. 342, 106 S. Ct. 343 (1985); see Walsh v. Pittsburgh Press Co., 160 F.R.D. 527, 529 (W.D. Pa. 1994) ["Walsh v. Pittsburgh"] (citing Hoffman Elec. Inc. v. Emerson Elec. Co., 754 F. Supp. 1070, 1075 (W.D. Pa. 1991)).
B. The Objectors Have Standing Both to Attack the Propriety of Class Certification and to Attack the Proposed Settlement
34. The Court rejects Plaintiffs' argument that the objectors have no standing to attack class certification. Plaintiffs have argued in their Reply Memorandum in Support of Class Certification that this Court should be skeptical of the objectors' attacks on class certification. Plaintiffs' Cert. Reply at pp. 1-3. Plaintiffs argue that the objectors, having had an opportunity to opt out and having chosen not to do so, cannot now oppose the existence of the class. Id. According to plaintiffs, upon receiving Class Notice, policyholders had two options: (1) they could opt out of the Class to pursue their individual claims, or (2) they could remain in the Class and accept or object only to the fairness and adequacy of the Proposed Settlement. Id. But, the Third Circuit has routinely allowed objectors to object to the propriety of class certification where a combined notice informed the policyholders of both the class action and the Proposed Settlement. See, e.g., Georgine, 83 F.3d 610 at 622 (addressing objectors' concerns regarding class certification); GM Trucks, 55 F.3d at 804-05 (same).
35. In this case, the Court approved a combined notice, i.e., to provide notice of the class action as required by Rule 23(c)(2) and to provide notice of the terms of settlement as required by Rule 23(e).
The purpose of class action notice is to allow a class member to choose whether to participate in the class action. Upon receiving Rule 23(b)(3) class action notice, a class member can opt out of the class if the class member prefers not to participate. See Rule 23(c)(2) ("the notice shall advise each member that . . . the Court will exclude the member from the class if the member so requests").
36. Plaintiffs observe that after receiving class notice in the ordinary case, a would-be class member cannot refuse to opt out and later object to class certification. Plaintiffs argue that through declining to opt out, the class member has in essence consented to the propriety of class certification. Courts have held, for example, that a decision not to opt out of a class should foreclose attacks on whether the class has adequate representation. See, e.g., Shore v. Parklane Hosiery Co., Inc., 606 F.2d 354, 357-58 (2d Cir. 1979) (observing that right to opt-out of the proposed settlement protects class members' interests from alleged inadequate representation); see also Torrisi v. Tucson Elec. Power Co., 8 F.3d 1370, 1378 (9th Cir. 1993) (holding that the failure to opt-out precluded challenge to adequate representation based upon purported conflicts of interest between subclasses), cert. denied, 512 U.S. 1220, 129 L. Ed. 2d 834, 114 S. Ct. 2707 (1994).
37. The purpose of the notice of settlement is to allow a class member who has consented to class certification to object, if necessary, to any proposed settlement. See 2 Newberg § 11.55, at 11-132 ("Any party to the settlement proceeding has standing to object to the proposed settlement.").
38. While plaintiffs argue that the objectors have no standing to challenge, in addition to the settlement terms, the propriety of class certification, the Court disagrees. Following plaintiffs' logic, no class member would ever be able to challenge the propriety of class certification and the Court would be denied the advantage of access to adverse perspectives. But, under Georgine, the Court must evaluate the propriety of class certification before contemplating the fairness of the settlement. Because the objectors' concerns may help crystallize issues affecting the propriety of class certification, the Court should consider these concerns in its class certification inquiry.
39. It seems counterintuitive that a class member who questions the propriety of class certification would desire to participate in the class action. It may even seem, as plaintiffs suggest, that the class member who does so is at best disingenuous.
Because the Court refuses to opine on the objectors' motives, and because it is theoretically possible that an objector may desire both to participate in the class and to challenge certification, the Court will permit the objectors to challenge the class certification elements.
C. The Prudential Life Insurance Sales Practices Class Action Satisfies Federal Rules of Civil Procedure 23(a)
1. The Estimated Eight Million Policyholders Satisfy the Numerosity Requirement
40. The proposed class must be comprised of members that are so numerous that "joinder of all members is impracticable." Fed. R. Civ. P. 23(a)(1); see In re ORFA Sec. Litig., 654 F. Supp. 1449, 1464 (D.N.J. 1987). To meet the numerosity requirement, class representatives must demonstrate only that "common sense" suggests that it would be difficult or inconvenient to join all class members. Lerch v. Citizens First Bancorp, Inc., 144 F.R.D. 247, 250 (D.N.J. 1992). The Court may consider the geographical dispersion of class members. Eisenberg, 766 F.2d at 785-86 (holding numerosity requirement to be satisfied where putative securities fraud class consisted of "more than 90 geographically dispersed plaintiffs"). "To be sure, when the class is very large--for example, numbering in the hundreds--joinder will be impracticable; but in most cases, the number that will, in itself, satisfy the Rule 23(a)(1) prerequisite should be much lower." 1 Newberg § 3.05, at 3-25.
41. In this case, the numerosity requirement unquestionably is satisfied. Potential class members are dispersed throughout the United States and number in excess of eight million. Common sense suggests that it would be at best extremely inconvenient to join all class members. While Beauvias argues that this class is too large, super-numerosity is not inconsistent with requirements of Rule 23(a)(1). See, e.g., General Tel. Co. of the N.W., Inc. v. EEOC, 446 U.S. 318, 330, 64 L. Ed. 2d 319, 100 S. Ct. 1698 (1980) (finding that the numerosity requirement is fact specific and proposes no absolute limitations). Rather, Beauvias' concern may implicate "superiority" issues and the Court will discuss Beauvias' concern in that context.
2. Prudential's Orchestrated Sales Presentations, the Plaintiffs' Common Legal Theories, Prudential's Common Defenses, and Other Common Issues Undoubtedly Satisfy the Commonality and Predominance Requirements