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March 17, 1997


The opinion of the court was delivered by: WOLIN








 I. The Plaintiffs, the Defendants, the Objectors, and Various State Insurance Representatives Participated in These Proceedings

A. The Class Includes All Persons or Entities Who Owned Certain Life Insurance Products During the Class Period
B. The Plaintiff Representatives Are Typical Victims of Prudential's Deceptive Sales Practices During the Class Period
1. Carol Nicholson Was Victimized by Churning, Vanishing Premium Tactics, and Investment Plan Tactics
2. Martin Dorfner Was Victimized by Churning and Vanishing Premium Tactics
3. Vincent and Elizabeth Kuchas Were Victimized by Churning and Investment Plan Tactics
4. Norman Gassman Was Victimized by Vanishing Premium and Investment Plan Tactics
C. The Court Has Granted the Requests of Several Class Members to Intervene
D. Plaintiffs Sued Prudential, a Mutual Life Insurance Company and One of the Largest Life Insurance Companies in the Country
E. Plaintiffs Have Also Sued Several Individual Defendants Who Were Upper Echelon Prudential Managers
F. Several State Government Representatives Have Contributed to These Proceedings

 II. Plaintiffs Allege that Prudential Conducted a Scheme to Deceive Policyholders into Buying Prudential Life Insurance Products

A. Prudential Used a Deceptive Sales Practice Called "Churning" to Sell Policyholders Replacement Policies
B. Prudential Misstated that the Premiums on Its Life Insurance Products, Including Abbreviated Payment Plan Policies, Would Vanish
C. Prudential Fraudulently Marketed Its Insurance Policies as Investment Vehicles
D. Prudential and the Individual Defendants Knew About the Fraudulent Marketing Scheme
E. Plaintiffs Allege Federal and State Causes of Action to Challenge Prudential's Deceptive Sales Practices

 III. Background

A. Plaintiffs Sued Prudential Throughout the Country Concerning Prudential's Deceptive Sales Practice and the Judicial Panel on Multi-District Litigation Consolidated the Actions and Transferred them to this Court
B. The New Jersey Insurance Commissioner Led Insurance Regulators Throughout the Country to Form a Task Force
C. Connecticut Conducted its Own Investigation and Produced an Independent Report
D. Plaintiffs Organized and the Court Approved a Consolidated Team to Prosecute the Prudential Fraudulent Sales Practices Actions
E. Plaintiffs Conducted Both Formal and Informal Discovery to Obtain Information Relating to Prudential's Alleged Fraudulent Sales Practices
F. Plaintiffs Rebuffed Prudential's Early Settlement Overtures While Discovery and Motion Practice Continued
G. Motion Practice Continued and Plaintiffs Pursued Informal Discovery
H. The Court Dismissed Many of the Claims in Plaintiffs' First Amended Complaint
I. The Task Force Found that Prudential Had Committed Widespread Sales Practice Abuse, Fined Prudential $ 35 Million, and Released the Task Force Plan
J. The MDL Panel Continued to Transfer Actions to this Court and Some Individual Plaintiffs Filed a Consolidated Motion to Remand
K. While Class Counsel Continued to Pursue Discovery and to Amend the Complaint, Prudential Counsel and Class Counsel Resumed Settlement Negotiations, Which Resulted in the Settlement Agreement and Later in the Stipulation of Settlement
L. The Court Ordered Conditional Certification of the Class and that the Parties Mail Class Members Notice of the Proposed Settlement

 IV. Stipulation of Settlement Terms

A. The Proposed Settlement Provides an Alternative Dispute Resolution Process Through Which Policyholders May Obtain Full Remediation
1. The ADR Procedures Cast a Wide Net to Gather Evidence Relevant to Class Members' Claims
2. The ADR Process Contains Specific Claim Evaluation Procedures to Ensure that All Relevant Evidence Is Considered
3. The ADR Process Provides that Claims Are Scored Generously According to the Class Members' Claim and the Available Evidence
B. Policyholders Who Do Not Desire to Participate in the ADR Process Receive Real and Valuable Benefits Through Basic Claim Relief
C. Financial Commitments Guarantee that Class Members Will Receive Substantial Relief Under Any Turn of Events
D. The Unprecedented Outreach Program Will Ensure that All Class Members Are Aware of Their Rights and Will Encourage Injured Class Members to Participate in the Proposed Settlement Relief
E. The Proposed Settlement Substantially Improves the Task Force Plan
1. The Proposed Settlement Provides Significant Enhancements to the Task Force Plan
a. The Proposed Settlement Provides Valuable Financial Commitments
b. The Proposed Settlement Improves Claim Scoring and Evaluation Criteria for the Benefit of Claimants
c. The Proposed Settlement Includes Four Valuable ADR Remedies Not Included in the Task Force ADR Plan
2. The Proposed Settlement Provides Significant Enhancements to Each Form of Basic Claim Relief and Creates a New Form of Basic Relief
3. The Proposed Settlement Provides an Elaborate Program to Inform Class Members of the Relief Available to Them
F. The Proposed Settlement Offers Significant Value to the Class

 V. Class Counsel and Prudential Have Provided Class Members With Extremely Effective Individual and Published Notice of the Proposed Class and Proposed Settlement

 VI. The Proposed Settlement Has Been Enhanced Since the Execution of the Stipulation of Settlement

A. The Court Ordered Additional Remediation to Class Members in Response to Reported Document Destruction Incidents
B. Through Negotiations with State Regulators Prudential Has Agreed to Several "Final Enhancements" to the Proposed Settlement

 VII. Class Response to the Proposed Class Certification and the Proposed Settlement Has Been Favorable

 VIII. The Fairness Hearing Provided the Parties, Objectors Appearing Through Counsel, State Regulators, and All Individual Objectors an Opportunity to Express Their Positions to the Court



 I. This Court Has Subject Matter Jurisdiction Over Plaintiffs' Claims Against Prudential

A. This Court Unquestionably Has Federal Question Jurisdiction Over this Action
B. The Court Also Has Diversity Jurisdiction Over this Action

 II. The Court's Jurisdiction over Plaintiffs' Claims Does Not Violate the Article III Case or Controversy Requirement

 III. The Court Has Personal Jurisdiction over All Plaintiffs, Present and Absent

 IV. The Predominance of Common Factual and Legal Issues, the Adequacy of Class Counsel and Class Representatives, and the Superiority of the Class Action Device as a Tool to Resolve the Current Controversy Require Class Certification

A. The Proposed Settlement Class Must Be Certified as if the Case Were to Be Tried
B. The Objectors Have Standing Both to Attack the Propriety of Class Certification and to Attack the Proposed Settlement
C. The Prudential Life Insurance Sales Practices Class Action Satisfies Federal Rules of Civil Procedure 23(a) and 23(b)(3)
1. The Estimated Eight Million Policyholders Satisfy the Numerosity Requirement
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
a. Plaintiffs Must Establish Many Common Factual Issues to Establish Liability
b. Plaintiffs Must Establish Many Common Legal Issues to Establish Liability
c. Prudential's Affirmative Defenses Add Common Issues to this Class Action
d. Prudential's Document Destruction is an Extremely Pervasive Issue Common to Class Members
e. Prudential's Fraudulent Concealment of Its Misrepresentations and Misdeeds Is an Issue Common to Class Members
f. The Agents' Use of Identical Oral Misrepresentations Weighs in Favor of the Finding of Predominance of Common Issues
(1) Prudential Agents' Oral Misrepresentations Were Uniform Throughout the Country
(2) To Create Consistent Oral Sales Presentations, Prudential Trained Its Agents and provided Its Agents with Uniform Sales Materials
g. Plaintiffs' Claims that May Entail Establishing Reliance Do Not Undermine the Predominance of Common Issues
h. Individual Damages Do Not Undermine the Predominance of Common Issues
i. Objectors' Arguments that Common Issues Do Not Predominate Are Unpersuasive
j. Common Issues Overwhelmingly Predominate the Individual Issues in this Case
3. The Plaintiff Representatives' Claims Are Typical of Those of the Other Class Members
4. Class Counsel and the Class Representatives Adequately Represent the Class
a. Class Counsel Adequately Represent the Class
(1) Class Counsel Are Extremely Qualified
(2) Class Counsel Also Are Extremely Committed to the Class and All Class Members and Are Unhampered By Any Conflicts of Interest or Separate Inventories of Cases
(3) The Value of the Proposed Settlement to All Class Members Demonstrates that Class Counsel's Representation Is Adequate
(4) Class Counsel Vigorously Have Represented the Class Throughout These Proceedings
b. The Plaintiff Representatives Adequately Represent the Class
5. The Class Action Device Is Superior to Any Other Means to Adjudicate this Controversy
a. There Are No Other Sensible Means to Adjudicate this Controversy
b. Individual Plaintiffs Have Little Interest in Controlling the Prosecution of Separate Actions
c. The Number of Actions Pending Elsewhere Weighs in Favor of Finding the Class Action Mechanism Superior
d. To Concentrate this Litigation in New Jersey Is Desirable
e. Although Managing this Case Will Be Challenging, No Anticipated Difficulties Render this Action Unmanageable

  V. The Class Notice and Supplemental Materials Fulfill the Notice Requirements of Federal Rules of Civil Procedure 23(c)(2) and 23(e)

A. The Class Notice Adequately Describes the Allegations of the Complaint
B. The Class Notice Adequately Advises Class Members of the Consequences of Deciding Not to Opt Out
C. The Class Notice Need Not Describe Parallel State Court Proceedings or All Potential State Law Causes of Action
D. The Class Notice Need Not Identify Objectors to the Proposed Settlement
E. The Class Notice Accurately Describes the Interaction Between the Task Force Plan and the Proposed Settlement
F. The Class Notice Adequately Indicates Class Members' Waiver of Their Right to a Jury Trial
G. The Class Notice Adequately Indicates Prudential's Agreement Not to Oppose Attorneys' Fees
H. The Class Notice Was Not Required to Include an "Opt-Out Form"
I. The Class Notice Was Not Required to Include Individual Policy Illustrations
J. The Class Notice Adequately Informed policyholders About the Information Considered in the ADR Process and Need Not Have Informed Policyholders Individually of Available Evidence
K. The Class Notice is Not "Cumbersome" or Inadequate to Alert Policyholders
L. The Class Notice Adequately Indicated the Deadline to File Objections or Opt Out
M. The Class Notice Fairly Describes Basic Claim Relief and Alternative Dispute Resolution Provisions
N. Objections that Ostensibly Attack the Class Notice But Really Concern Proposed Settlement Terms Will Be Addressed in the Context of the Proposed Settlement's Fairness
O. Considering All of the Circumstances, Class Notice in the Present Case Comports with Rule 23 and with Due Process


  VI. The Proposed Settlement Is Fair, Reasonable, and Adequate In Light of the Multifarious Factors that the Court Must Consider

A. The Proposed Settlement Provides Extraordinary Relief to Injured Policyholders
B. The Complexity of this Action and the Likely Lengthy Duration of the Litigation Warrant Approval of the Proposed Settlement
C. Class Reaction to the Proposed Settlement Has Been Overwhelmingly Favorable and Weighs in Favor of Class Approval
D. Approval of the Proposed Settlement at this Stage of the Proceedings Is Appropriate Because the Plaintiffs Have Completed Extensive Discovery and Settlement Now Would Save the Extensive Costs of Additional Discovery and Trial
E. The Significant Risks Attendant to Plaintiffs' Ability to Establish Prudential's Liability and Damages Weigh In Favor of Approving the Proposed Settlement
F. The Risks of Maintaining this Class Action Through Trial Weigh in Favor of Approving the Proposed Settlement
G. Prudential's Inability to Withstand a Greater Judgment Is a Factor Weighing in Favor of Approving the Proposed Settlement
H. The Proposed Settlement Is Reasonable in Light of the Best Possible Recovery and All of the Attendant Risks of Litigation
I. Plaintiffs Conducted Adequate Discovery Precedent to Agreeing to Settle
J. The Proposed Settlement is Reasonable In Light of the Plaintiffs' Preliminary Discovery
K. The Settlement Accounts for All Causes of Actions and Types of Relief Sought in the Second Amended Complaint
L. The Parties Completed Negotiations of the Proposed Settlement Before Negotiating Attorneys' Fees and the Attorneys' Fee Agreement Is Legal and Proper
M. Class Counsel's Approval of the Proposed Settlement Indicates Its Fairness
N. The Objectors' Panaloply of Other Concerns Fall Under Their Own Weight
1. The Proposed Settlement Improves Upon the Task Force Plan
2. ADR Review Is Impartial
3. The ADR Process is Simple
4. The ADR Process Provides Adequate Substantive Relief
5. The Proposed ADR Scoring Provisions Adequately Determine Whether Prudential Misled Individual Class Members
6. The ADR Process is an Appropriate Mechanism to Assess Whether Class Members Were Affected by Prudential's Deceptive Sales Practices
7. The ADR Process Adequately Identifies Churning Cases
8. The ADR Process Adequately Identifies Cases in Which Prudential Sold Life Insurance Policies as Investment Vehicles
9. The Proposed Presumptions for APP Claims Are Unnecessary and Inappropriate
10. No Additional Evidentiary Considerations Are Necessary
11. Agent Conduct Is an Appropriate Talisman of Prudential's Wrongful Conduct
12. A Presumption in Favor of the Policyholder Where the Policyholder's Statement Conflicts with an Agent's Statement Is Unnecessary and Undesirable
13. The Agent's Presence Before a Decisionmaker Is Unnecessary to Adjudicate Class Members' Claims
14. The Complaint History Factor is Adequate
15. The Proposed Settlement's Method of Assembling Associated Complaints is Adequate
16. Class Members Need Not Be Informed of Agents' Complaint Histories Prior to Choosing Relief
17. Unauthorized Execution as a Positive Consideration is Adequately ...

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