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IN RE THE PRUDENTIAL INS. CO. OF AMERICA SALES PRA

March 17, 1997

IN RE: THE PRUDENTIAL INSURANCE COMPANY OF AMERICA SALES PRACTICES LITIGATION; THIS DOCUMENT RELATES TO: ALL ACTIONS

ALFRED M. WOLIN, U.S.D.J.

VOLUME 2

CONCLUSIONS OF LAW

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

 1. After full consideration of the arguments presented and the applicable law, the Court finds that its exercise of subject matter jurisdiction over this case is appropriate. *fn30" The Court asserts both federal question and federal diversity jurisdiction over the entire action.

 
A. This Court Unquestionably Has Federal Question Jurisdiction Over this Action

 2. Plaintiffs allege, and this Court agrees, that the Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §§ 1331 and 1337, and has supplemental jurisdiction under 28 U.S.C. § 1367. Second Am. Compl. at P 2. Plaintiffs allege claims under Section 10(b) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78j(b) and 78t(a)) and under Rule 10b-5 promulgated thereunder by the Securities and Exchange Commission (17 C.F.R. § 240.10b-5) and common law claims. Second Am. Compl. at P 1.

 3. Specifically, named plaintiff Martin Dorfner asserts claims against Prudential and the individual defendants under Sections 10(b) and 20(a) of the Securities Exchange of 1934 and for violation of Rule 10b-5. Second Am. Compl. at PP 1, 130-45, 181-96. Martin Dorfner alleges that, as a part of Prudential's scheme to defraud life insurance policyholders, Prudential sold him a VAL policy in violation of federal securities laws using fraudulent sales practices in violation of various state laws.

 5. This Court has jurisdiction also over the remaining claims of these class members and the other class members in this action, because all of the claims are part of the same "case or controversy under Article III of the United States Constitution," and, therefore, the additional claims are within this Court's supplemental jurisdiction pursuant to 28 U.S.C. § 1367. *fn31" Under section 1367, the Court has supplemental jurisdiction over all claims that are so closely related that they form part of the same case or controversy under Article III. Id. This is true even where the claims involve additional parties. Id.

 6. Claims are "so closely related" that they form part of the "same case or controversy" if the claims share "significant factual elements." See HB Gen. Corp. v. Manchester Partners, L.P., 95 F.3d 1185, 1198 (3d Cir. 1996); Sinclair v. Soniform, Inc., 935 F.2d 599, 603 (3d Cir. 1991) ("Claims are part of the same constitutional case if they derive from a common nucleus of operative fact . . . . '") (quoting United Mine Workers v. Gibbs, 383 U.S. 715, 725, 16 L. Ed. 2d 218, 86 S. Ct. 1130 (1966)).

 7. Here, the state law claims are part of the same case or controversy as the federal claims because the claims are inextricably factually intertwined. *fn32" Dorfner and others allege that Prudential sold its VAL policies in violation of federal laws through the financing mechanisms and other deceptive sales practices that comprise plaintiffs' state law claims. All the claims are premised upon a common course of conduct by Prudential; all relate to the same alleged companywide development and implementation of the patently fraudulent sales techniques. *fn33" See Palmer v. Hosp. Auth. of Randolph County, 22 F.3d 1559, 1563-64 (11th Cir. 1994) ("same case or controversy" satisfied where claims related to the same course of events, and would involve the same witnesses, presentation of the same evidence, and determination of the same, or very similar, facts); cf. In re IGI Sec. Litig., 122 F.R.D. 451, 461 (D.N.J. 1988) (pendent state law negligent misrepresentation claim certified when claims presented essentially same issues asserted by federal securities law claims).

 8. Where the original federal jurisdiction claim would proceed to trial absent settlement, as is true in this case, to promote judicial economy and the convenience of and fairness to the parties, the district court should exercise jurisdiction over state claims based on the same nucleus of operative facts unless there exists some substantial countervailing consideration. See Lancaster, 45 F.3d at 788; Sparks v. Hershey, 661 F.2d 30, 33-34 (3d Cir. 1981) ("This is especially true where it is desirable to avoid the possibility of duplicating the recovery of damages."). Because there are no substantial countervailing considerations, the Court will exercise its discretion to take jurisdiction over the entire case. *fn34" See Growth Horizons, 983 F.2d at 1285 n.14 (noting that section 1367 "states that federal courts shall exercise supplemental jurisdiction over pendent claims arising out of the same case or controversy and may decline to exercise jurisdiction if all federal claims are dismissed") (emphasis in original); Stehney v. Perry, 101 F.3d 925, 939 (3d Cir. 1996) (decision to exercise supplemental jurisdiction is committed to district court's jurisdiction).

 9. Accordingly, the Court unquestionably has supplemental jurisdiction over the entire dispute and the Proposed Settlement and will exercise its jurisdiction. See, e.g., Bell Atl. Corp. v. Bolger, 2 F.3d 1304, 1305 (3d Cir. 1993) (subject matter jurisdiction in nationwide class settlement of federal and state law claims premised on 15 U.S.C. § 78aa, 28 U.S.C. § 1331, and 28 U.S.C. § 1367).

 B. The Court Also Has Diversity Jurisdiction Over this Action

 10. Plaintiffs allege that this Court has subject matter jurisdiction over this action also pursuant to 28 U.S.C. § 1332, and the Court agrees. Second Am. Compl. at P 3. The named plaintiffs and defendants are citizens of diverse states. Id. Plaintiffs allege that each named plaintiff meets the $ 50,000 amount in controversy requirement because each plaintiff lost more than $ 50,000 exclusive of interest and costs in "insurance coverage, premiums paid, dividends and/or interest income and accumulated cash values." Id. Plaintiffs allege that each meets the $ 50,000 threshold also because of the punitive damages and attorneys fees requested, in which each plaintiff allegedly has an undivided interest. Id.

 11. Section 1332 of title 28 provides that this Court has jurisdiction over civil actions between citizens of different states where the amount in controversy exceeds the sum of $ 50,000 exclusive of interest and costs. 28 U.S.C. § 1332; see Packard v. Provident Nat'l Bank, 994 F.2d 1039, 1044 (3d Cir.), cert. denied, 510 U.S. 964, 126 L. Ed. 2d 373, 114 S. Ct. 440 (1993). In a class action suit, diversity between citizens requires that there must be complete diversity between the named representatives of the class and the defendants. See In re School Asbestos Litig., 921 F.2d 1310 at 1317 (observing that only named plaintiff must be diverse to establish diversity). The objectors do not dispute that the diversity of citizenship requirement is satisfied.

 12. The parties contest, however, whether this action satisfies the amount in controversy requirement. Objectors contend that plaintiffs fail to satisfy the amount in controversy requirement for a class action because each member's claim must and cannot satisfy the jurisdictional minimum. The party asserting federal subject matter jurisdiction must demonstrate that the amount in controversy requirement is satisfied. See Packard, 994 F.2d at 1045. The face of the complaint determines jurisdiction if the claim appears to be made in good faith: "The rule governing dismissal for want of jurisdiction in cases brought in the federal court is that . . . the sum claimed by the plaintiff controls if the claim is apparently made in good faith." See id. at 1045-46 (citing St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288-89, 82 L. Ed. 845, 58 S. Ct. 586 (1938)). If the Court finds to a "legal certainty" that the threshold amount is not met, then this Court must reject federal diversity jurisdiction. See St. Paul Mercury Indem. Co., 303 U.S. at 290; see also Columbia Gas Transmission Corp. v. Tarbuck, 62 F.3d 538, 541 (3d Cir. 1995) ("dismissal is appropriate only if the federal court is certain that the jurisdictional amount cannot be met"); Suber v. Chrysler Corp., 104 F.3d 578, 583 (3d Cir.) (same), amended by, F.3d , 1997 WL 76128 (Feb. 18, 1997). Members of a class may not aggregate their claims to reach the $ 50,000 amount in controversy requirement. See Zahn v. International Paper Co., 414 U.S. 291 at 301, 38 L. Ed. 2d 511, 94 S. Ct. 505; Packard 994 F.2d at 1045 (citing Snyder v. Harris, 394 U.S. 332, 338, 22 L. Ed. 2d 319, 89 S. Ct. 1053).

 13. Where plaintiffs seek equitable relief pertaining to the enforcement of insurance policies, the face value of the policy is the measure of the amount in controversy. While Krell contends that the measure should be the cash surrender value or some other figure, *fn35" courts have uniformly held that, where the validity of the policy is at issue, the proper measure is the face value. See, e.g., Bell v. Preferred Life Assurance Soc'y, 320 U.S. 238, 240, 88 L. Ed. 15, 64 S. Ct. 5 (1943) ($ 1,000 face value of insurance certificate, not the $ 202 in premiums, satisfied amount in controversy requirement in action concerning certificate purchased as a result of fraudulent misrepresentations); Stephenson v. Equitable Life Assurance Soc'y, 92 F.2d 406, 410 (4th Cir. 1937) (life insurance face value, plus value of double indemnity feature, was amount in controversy in suit seeking declaratory relief restoring policy to force); Guardian Life Ins. Co. of America v. Muniz, 101 F.3d 93, 94 (11th Cir. 1996) (face value of policy, not loan value, cash surrender value, or paid-up value of polices, was amount in controversy in insurer's action seeking cancellation of life insurance policies); New York Life Ins. Co. v. Swift, 38 F.2d 175, 176-77 (5th Cir. 1930) (same).

 14. The Supreme Court had held that each member of a class action must meet the amount in controversy requirement to establish diversity jurisdiction. Zahn v. International Paper Co., 414 U.S. 291, 301, 38 L. Ed. 2d 511, 94 S. Ct. 505 (1973); Snyder v. Harris, 394 U.S. 332, 338, 22 L. Ed. 2d 319, 89 S. Ct. 1053 (1969). But, plaintiffs no longer have to comply with the Zahn rule because Zahn was effectively overruled by 28 U.S.C. § 1367. *fn36" Only the named plaintiff must satisfy the jurisdictional amount in controversy requirement. Although the Third Circuit has not yet addressed the issue, see, e.g., Packard, 994 F.2d at 1045-46 n.9, a plain reading of section 1367(a) clearly permits the exercise of supplemental jurisdiction over class plaintiffs' claims that do not meet the amount in controversy requirement. See In re Abbott Labs, 51 F.3d 524, 529 (5th Cir. 1995) (holding that a plain reading of section 1367 overrules Zahn); Deep v. Manufacturers Life Ins. Co., 944 F. Supp. 358, 363 (D.N.J. 1996) (same); Vairo Affirm. (observing that plain meaning of section 1367 supports finding that section 1367 overruled Zahn); see also Stromberg Metal Works v. Press Mechanical, Inc., 77 F.3d 928, 930 (7th Cir. 1996) (holding that by its plain meaning section 1367 overrules Clark v. Paul Gray, Inc., 306 U.S. 583, 83 L. Ed. 1001, 59 S. Ct. 744 (1939), in which the Supreme Court held in a non-class action case that each plaintiff's claim must satisfy the amount in controversy requirement); Gandolfo v. U-Haul International, Inc., 1996 U.S. Dist. LEXIS 20736, Civ. No. 95-4393, at 5 (D.N.J. Dec. 19, 1996) (holding that district court can exercise supplemental jurisdiction over a co-plaintiff' claim that fails to meet the amount in controversy requirement); Lindsay v. Kvortek, 865 F. Supp. 264, 276 (W.D. Pa. 1994) (same).

 15. Section 1367(a) authorizes the exercise of supplemental jurisdiction over class members' claims that fail to meet the amount in controversy requirement, because section 1367(a) unequivocally confers jurisdiction on the district court over "all other claims that are so related to the claims in the action within such original jurisdiction that they form part of the came case or controversy." See, e.g., In re Abbott Labs, 51 F.3d 524, 528-29; Stromberg, 77 F.3d at 931. Class members' claims that may fail to meet the amount in controversy requirement certainly form part of the same "case or controversy" as the class members' claims that meet the threshold amount.

 16. Moreover, section 1367(b) disallows 1367(a) supplemental jurisdiction over claims founded solely on diversity and joined by certain Rules, specifically Federal Rules of Civil Procedure 14, 19, 20, and 24; Federal Rule of Civil Procedure 23, however, is not among the enumerated exceptions. Under the maxim expressio unius est exclusio alterius, the presence of these exclusions and the absence of Rule 23 on the list confirms the propriety of the exercise of supplemental jurisdiction in a Rule 23 class action case over plaintiffs' claims that may fail to meet the jurisdictional threshold amount.

 17. The Court is not persuaded by the reasoning of the courts that have refused to exercise supplemental jurisdiction over class members' claims where a named plaintiff has satisfied the amount in controversy requirement, see, e.g., DeCastro v. AWACS, Inc., 935 F. Supp. 541, 547 (D.N.J. 1996) (refusing to exercise jurisdiction where named plaintiffs failed to satisfy threshold amount in controversy); Garcia v. General Motors Corp., 910 F. Supp. 160, 164 (D.N.J. 1995) ("To date, Zahn and Packard remain good law in the Third Circuit. Accordingly, GMC must establish that each of the Putative Plaintiffs meets the amount-in-controversy requirement."); In re Potash Antitrust Litig., 866 F. Supp. 406 (D. Minn. 1994) (summarizing pro-Zahn and anti-Zahn cases). Maintaining that they are bound by Zahn, these courts rely on the legislative history of section 1367 to suggest that section 1367 did not overrule Zahn: "The section is not intended to affect the jurisdictional requirements of 28 U.S.C. § 1332 in diversity-only class actions, as those requirements were interpreted prior to Finley. " H.R. Rep. No. 101-734, 101st Cong., 2d Sess. 29, 76-77 (1990), reprinted in 1990 U.S.S.C.A.N. 6802, 6875.

 18. But, because the plain language of the statute is clear and the legislative history that these cases quote conflicts with the facial meaning of the statute, the Court cannot consider that history. See City of Chicago v. Environmental Defense Fund, 511 U.S. 328, 114 S. Ct. 1588, 128 L. Ed. 2d 302 (1994); West Virginia Univ. Hosp., Inc. v. Casey, 499 U.S. 83, 98-99, 113 L. Ed. 2d 68, 111 S. Ct. 1138 (1991); In re Continental Airlines, Inc., 932 F.2d 282, 287 (3d Cir. 1991). Moreover, less frequently cited legislative history of section 1367 demonstrates that the Federal Courts Study Committee ("FCSC"), which recommended the enactment of section 1367 to Congress, informed Congress that Zahn made little sense from a policy standpoint. Vairo Affirm. at 3 (citing 1 FCSC Working Papers And Subcommittee Reports 560, 561 n.33 (1990)). Indeed, the FCSC proposal, which is "fairly similar to the statutory language ultimately adopted," advised Congress to overrule Zahn. Vairo Affirm. at 3.

 19. In this case, the named plaintiffs have alleged claims exceeding $ 50,000 each. The Second Amended Complaint states that "each Plaintiff lost more than $ 50,000 (exclusive of interest and costs) in insurance coverage, premiums paid, dividends and/or interest income and accumulated cash values . . . ." Second Am. Compl. at P 3. *fn37" Furthermore, the face value of the policies alone for each of the named plaintiffs exceeds $ 50,000. Mrs. Nicholson alleges that she purchased a $ 100,000 policy from Prudential as a result of Prudential's common deceptive scheme. Second Am. Compl. at P 13. The Kuchases complain that they purchased $ 100,000 and $ 80,000 policies as a result of the scheme. Second Am. Compl. at PP 15-16. Mr. Gassman argues that he was persuaded to contribute the funds of his $ 20,000 Certificate of Deposit into a variable appreciable life policy with a face value of $ 150,000. Second Am. Compl. at PP 161-64.

 20. Alternatively, even if the face value of the policy were not determinative of the amount in controversy, the Court clearly has jurisdiction over Ms. Nicholson's claims and supplemental jurisdiction over the remaining claims under section 1367. Ms. Nicholson lost over $ 100,000 in actual death benefits. Ms. Nicholson expressly alleges that, due to Prudential's wrongful conduct, upon the death of her husband in August 1994, the $ 130,376 in insurance coverage that she expected from the Prudential life insurance policies sold to her had dwindled to $ 22,514.43. Second Am. Compl. at P 118.

 21. Krell's challenges to plaintiffs' ability to satisfy the amount in controversy requirement are legally incorrect and Krell fails to establish that, to a "legal certainty," the named plaintiffs' claims fail to exceed $ 50,000. *fn38" Krell argues that the amount in controversy requirement is not satisfied because policyholders are likely to recover only several thousand dollars in compensatory damages and because the total damages requested in the Second Amended Complaint substantially exceed Prudential's net worth and could not be awarded. Krell Brief at 26. A judgment or settlement for less than the jurisdictional amount does not indicate a failure to meet the amount in controversy requirement for purposes of establishing diversity jurisdiction. See, e.g., Suber, 104 F.3d at 583 ("Once a good faith pleading of the amount in controversy vests the district court with diversity jurisdiction, the court retains jurisdiction even if the plaintiff cannot ultimately prove all of the counts of the complaint or does not actually recover damages in excess of $ 50,000.") (citation omitted). Therefore, the Court rejects Krell's arguments, because whether the amount in controversy is satisfied turns on plaintiffs' allegations in the complaint and not on the defendant's financial condition or on the ultimate resolution of plaintiffs' claims. See Packard, 994 F.2d at 1045-46 (citation omitted).

 22. Consequently, because plaintiffs' allegations satisfy the amount in controversy and because it does not appear to a legal certainty that the claim is really for less than the jurisdictional amount, the Court finds also that it has subject matter jurisdiction over plaintiffs' claims by virtue of its diversity jurisdiction.

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

 24. While Krell concedes that each named plaintiff has alleged a cognizable claim against Prudential that gives rise to a "case or controversy," Krell raises novel variations on the case or controversy theme. Krell Brief at 39-41. First, Krell mistakenly argues that because the class is defined to include all Prudential policyholders from 1982 to 1995, some of these policyholders may not have been injured by Prudential and, therefore, this entire case does not constitute a "case or controversy." Krell again presents no authority, and the Court is aware of none, for the notion that the Court has no jurisdiction over this action merely because some class members may not currently assert a claim. The current class definition is similar to many commonly accepted definitions. The current class is akin, for example, to those used in securities fraud class action cases, which commonly define a class to include all purchasers of the defendant company's common stock during a specified period of time. See, e.g., Green v. Wolf Corp., 406 F.2d 291, 299 (2d Cir. 1968), cert. denied, 395 U.S. 977, 23 L. Ed. 2d 766, 89 S. Ct. 2131 (1969). The current class also bears resemblance to a class defined to include all purchasers of a specific product, the court having deferred the issue of whether individuals have suffered injury and what those injuries are to a subsequent procedure. See, e.g., In re School Asbestos Litig., 104 F.R.D. 422, 424, 433-34 (E.D. Pa. 1984), aff'd in pertinent part, 789 F.2d 996, 998-99, 1008-11 (3d Cir. 1986) (certifying Rule 23(b)(3) opt-out class of "essentially all public school districts and private schools in the nation"). Indeed, class action experts encourage plaintiffs to define a class in similar objective terms, without regard to the merits of the claim or the specific relief sought. See 2 Newberg, § 6.14, at 6-61; Manual for Complex litigation § 30.14 (3d ed. 1995).

 25. Second, in his Supplemental Objection, Krell raises a new "case or controversy" argument. He contends that any "case or controversy" ceases upon Court approval of the Proposed Settlement, depriving the Court of continuing jurisdiction to determine the method to allocate settlement funds such as the Additional Remediation Amount. Krell Supp. Obj. at 3. It is well settled, however, that this Court may retain jurisdiction to supervise the fulfillment of the Proposed Settlement, even after a final judgment has been entered and the appeal period has expired. See, e.g., Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 114 S. Ct. 1673, 1676-77, 128 L. Ed. 2d 391 (1994) (a district court's explicit retention of jurisdiction over a settlement agreement, or its incorporation of that agreement into its final order, satisfies any jurisdictional concerns); Georgine v. Amchem Prods., Inc., 157 F.R.D. 246, 336 (E.D. Pa. 1994) (district court expressly retained jurisdiction over settlement), vacated on other grounds by, 83 F.3d 610 (3d Cir.), cert. granted sub nom., Amchem Prods. v. Windsor, U.S. , 136 L. Ed. 2d 297, 117 S. Ct. 379 (1996); 2 Newberg § 11.33, at 11-67 (and numerous authorities cited therein).

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

 27. Krell cites Phillips Petroleum for the proposition that a class action defendant cannot assert a res judicata defense against absent class members if the district court enters a class action judgment without proper personal jurisdiction over an absent party. Krell Supp. Obj. at 2. Krell's observation is axiomatic, but irrelevant. As is his style, Krell does not reason an argument, but expects the Court to extrapolate Krell's intended meaning. *fn39" The Court gathers that Krell impliedly argues that this Court has no personal jurisdiction over absent plaintiffs. But, as, discussed previously, the Court clearly has personal jurisdiction over absent individual plaintiffs. Because Krell has offered absolutely no support for the argument, and the Court is not aware of any, the Court rejects the argument.

 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

 28. Class certification "enables courts to treat common claims together, obviating the need for repeated adjudications of the same issues." General Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768, 783 (3d Cir.), ["GM Trucks"], cert. denied, U.S. , 133 L. Ed. 2d 45, 116 S. Ct. 88 (1995). The class action device achieves also other very important objectives: "the protection of the defendant from inconsistent obligations, the protection of the interests of absentees, the provision of a convenient and economical means for disposing of similar lawsuits, and the facilitation of the spreading of litigation costs among numerous claimants with similar claims." Id. at 783-84 (quoting United States Parole Comm'n v. Geraghty, 445 U.S. 388, 402-03, 63 L. Ed. 2d 479, 100 S. Ct. 1202 (1980)). The last goal has particular significance because without spreading litigation costs many injured individuals will be unable to obtain relief: "When it is not economically feasible to obtain relief within the traditional framework of a multiplicity of small individual suits for damages, aggrieved persons may be without any effective redress unless they may employ the class action device." Id. 55 F.3d 768 at 784 (citation omitted).

 29. Courts increasingly have used the class action device in cases, such as this one, in which a class of policyholders has sued an insurance company for misrepresentations in the sale of insurance policies and benefit plans. See, e.g., Reserve Life Ins. Co. v. Kirkland, 917 S.W.2d 836 (Tex. App. 1996); Janicik v. Prudential Ins. Co. of America, 305 Pa. Super. 120, 451 A.2d 451 (Pa. Super. Ct. 1982). And several courts have certified classes of policyholders suing insurance companies other than Prudential in cases involving deceptive sales practices identical to those that the plaintiffs now allege Prudential has committed. See, e.g., Willson v. New York Life Ins. Co., 1995 N.Y. Misc. LEXIS 652, No. 94/127804, (N.Y. Sup. Ct. July 31, 1995) (certifying settlement class in vanishing premium case), aff'd 644 N.Y.S.2d 617, 228 A.D.2d 368 (1996); Goshen v. Mutual Life Ins. Co. of New York, No. 95-600466 (N.Y. Sup. Ct. June 7, 1996) (certifying class in case involving both vanishing premium and churning allegations).

 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). *fn40" 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. *fn41" 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. *fn42"

 
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

 42. In Rule 23(b)(3) class actions, courts often apply the Rule 23(a)(2) commonality requirement and the 23(b)(3) predominance tests together. 1 Newberg § 3.13, at 3-71. And the Third Circuit follows this approach. See Georgine, 83 F.3d 610 at 626. For the class action device to be appropriate, there must be "questions of law or fact common to the class." Fed. R. Civ. P. 23(a)(2). This requirement is satisfied "if the named plaintiffs share at least one question of fact or law with the grievances of the prospective class." Baby Neal v. Casey, 43 F.3d 48, 56 (3d Cir. 1994) (citation omitted). The commonality requirement is "easily met," because it is satisfied by the presence of a single common issue. 1 Newberg § 3.10, at 3-50 to 3-52. And for a class certified under Rule 23(b)(3), the Court must find that these common questions "predominate." To evaluate predominance, the Court must determine whether the efficiencies gained by class resolution of the common issues are outweighed by individual issues presented for adjudication. See generally Newberg § 4.25, at 4-81 to 4-86. The Third Circuit has observed that even a few common issues may satisfy the predominance requirement where the resolution of these issues greatly will advance the litigation:

 
There may be cases in which class resolution of one issue or a small group of them will so advance the litigation that they may fairly be said to predominate. Resolution of common issues need not guarantee a conclusive finding on liability . . . nor is it a disqualification that damages must be assessed on an individual basis.

 In re Sch. Asbestos Litig., 789 F.2d 996, 1010 (3d Cir.) (citations omitted), cert. denied, 479 U.S. 852, 93 L. Ed. 2d 117, 107 S. Ct. 182, and by, 479 U.S. 915, 93 L. Ed. 2d 291, 107 S. Ct. 318 (1986).

 43. Where many purchasers allegedly have been defrauded over time by similar misrepresentations, or by a common scheme to which alleged non-disclosures related, courts have found that the purchasers have a common interest in determining whether the defendant's course of conduct is actionable. See, e.g., Blackie v. Barrack, 524 F.2d 891, 902 (9th Cir. 1975) (gathering authority), cert. denied, 429 U.S. 816, 50 L. Ed. 2d 75, 97 S. Ct. 57 (1976); Lerch, 144 F.R.D. at 252 (finding predominance requirements satisfied where defendant's challenged activity was a common course of conduct); In re Western Union Sec. Litig., 120 F.R.D. 629, 637 (D.N.J. 1988) (same); see also Seidman v. American Mobile Sys., Inc., 157 F.R.D. 354, 366 (E.D. Pa. 1994) (finding plaintiffs' allegations of defendant's single, ongoing course of fraudulent behavior satisfied commonality and predominance requirements); Zinberg v. Washington Bancorp, Inc., 138 F.R.D. 397, 410 (D.N.J. 1990) ("Where all class members are united in their desire to establish the defendants' complicity and liability, individual issues, if they exist, are secondary.") The Third Circuit has implicitly endorsed this approach in reversing the district court for denying certification in Eisenberg. See 766 F.2d 770 at 786 (declaring that the presence of individual questions does not preclude a finding that predominance requirements are satisfied).

 44. Thus, courts frequently find allegations that the defendant engaged in a common course of conduct to satisfy the commonality and predominance requirements. See, e.g., Seidman, 157 F.R.D. at 360; In re Data Access Sys. Sec. Litig., 103 F.R.D. 130, 142 (D.N.J. 1984) (finding requirements met where there were common questions whether corporation's financial statements and prospectus contained material misrepresentations or omissions); Shankroff v. Advest, Inc., 112 F.R.D. 190, 193 (S.D.N.Y. 1986) ("Since plaintiff's allegations focus on overall managerial decisions which affected all [of defendant's] clients, questions of oral representations or individual reliance do not overwhelm the issues common to the class."); 1 Newberg § 3.10, at 3-51 ("When the party opposing the class has engaged in some course of conduct that affects a group of persons and gives rise to a cause of action, one or more of the elements of that cause of action will be common to all of the persons affected.").

 45. Here, the commonality and predominance requirements are satisfied because not one, but many issues are common to all of the plaintiffs' claims. Miller Decl. at PP 12-13. All of plaintiffs' claims stem from Prudential's alleged common course of conduct. Particularly, all plaintiffs allege that Prudential encouraged or otherwise permitted fraudulent sales practices. *fn45" Although individual class members purchased their policies independently, Prudential allegedly induced them to do so through sales presentations containing standardized, coordinated, and uniformly deceptive sales representations and omissions.

 
a. Plaintiffs Must Establish Many Common Factual Issues to Establish Liability

 46. It is readily apparent that class members will have to establish many of the same factual allegations to establish liability. Plaintiffs must establish, for example:

 
. Prudential's common course of conduct,
 
. Prudential's development of the sales presentations and materials, and artificial inflation and maintenance of dividend scales,
 
. Prudential's sale of replacement policies by material omission,
 
. Prudential's sale of vanishing premium policies by material omission,
 
. Prudential's sale of policies by misrepresenting the policies as investment or retirement plans,
 
. Prudential's failure to train or supervise agents,
 
. Prudential's unwillingness to prevent deceptive sales practices, and
 
. Prudential's scienter.

 47. The MDL Panel recognized the predominance of common factual issues in ...


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