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In re MI Windows and Doors, Inc.

United States Court of Appeals, Fourth Circuit

June 20, 2017

In re: MI WINDOWS AND DOORS, INC., PRODUCTS LIABILITY LITIGATION.
v.
MI WINDOWS & DOORS, INC., Defendant-Appellee, ABELLA OWNERS' ASSOCIATION, Respondent - Appellant, CONTRACTOR PLAINTIFFS' LIAISON COUNSEL; HOMEOWNER PLAINTIFFS' LIAISON COUNSEL; HOMEOWNER PLAINTIFFS' LEAD COUNSEL; CONTRACTOR PLAINTIFFS' LEAD COUNSEL, Plaintiffs, and SIGNATURE HOMES, INC.; SIGNATURE AT ABELLA, LLC; SIGNATURE PROPERTIES, INC.; KULLY MANDON; LINDA KIME; ROBERT HUGGINS, Defendants, J. T. WALKER INDUSTRIES, INC., Intervenor.

          Argued: May 9, 2017

         Appeal from the United States District Court for the District of South Carolina, at Charleston. David C. Norton, District Judge. (2:12-mn-00001-DCN; MDL No. 2333)

         ARGUED:

          George A. Somerville, HARMAN CLAYTOR CORRIGAN & WELLMAN, P.C., Richmond, Virginia, for Appellant.

          Patrick J. Perrone, K&L GATES LLP, Newark, New Jersey, for Appellee.

         ON BRIEF:

          Scott A. Williams, Beth Tenney, WILLIAMS & GUMBINER LLP, Greenbrae, California; C. Fredric Marcinak, III, SMITH MOORE LEATHERWOOD, LLP, Greenville, South Carolina, for Appellant.

          Richard A. Farrier, Jr., Charleston, South Carolina, Loly G. Tor, K&L GATES LLP, Newark, New Jersey, for Appellee.

          Before NIEMEYER, WYNN, and HARRIS, Circuit Judges.

         Affirmed by published opinion. Judge Niemeyer wrote the opinion, in which Judge Wynn and Judge Harris joined.

          NIEMEYER, Circuit Judge.

         In this appeal, Abella Owners' Association, a California nonprofit mutual benefit corporation, seeks relief from the enforcement of a final class action judgment entered in this multidistrict litigation.

         In 2012, the judicial panel on multidistrict litigation transferred 18 class actions filed against MI Windows & Doors, Inc., in various districts to the District of South Carolina as "MI Windows & Doors, Inc., Products Liability Litigation" ("the MDL") for consolidated pretrial proceedings. In the transferred actions, the plaintiffs sought damages caused by MI Windows' manufacture of allegedly defective windows.

         The parties to the MDL reached a settlement, which the district court preliminarily approved while also preliminarily certifying a settlement class under Federal Rule of Civil Procedure 23. In its order of preliminary approval, the court directed the parties to notify class members (1) of the settlement, (2) of the class members' option to withdraw from the action, and (3) of the date of a hearing to determine the fairness, reasonableness, and adequacy of the settlement. After the opt-out deadline passed, the court conducted the fairness hearing and entered a final judgment, approving the settlement, enjoining the class members from pursuing other related claims against MI Windows, and dismissing the transferred actions.

         Abella Owners' Association, one of the class members who received notice and did not opt out of the class action, nonetheless continued to prosecute its own litigation against MI Windows, which it had previously filed in a California state court. MI Windows filed a motion in the district court to enforce the class action settlement against Abella, seeking an injunction prohibiting it from continuing the California action. In response, Abella filed an opposition contending, among other things, that the district court lacked authority to enjoin its prosecution of the state action against MI Windows by reason of the Anti-Injunction Act, 28 U.S.C. § 2283, and that, in any event, Abella should not be bound by the class action judgment because of the excusable neglect of its counsel in overlooking the opt-out deadline. The district court rejected Abella's arguments and, by order dated January 15, 2016, enjoined Abella from proceeding with its claims against MI Windows in the California state action.

         Because we conclude that the district court's injunction was justified by the "relitigation exception" of the Anti-Injunction Act and that the district court did not abuse its discretion in concluding that the neglect of Abella's counsel was not excusable, we affirm.

         I

         Beginning in 2010, 18 class actions were filed in various districts against MI Windows, alleging that MI Windows manufactured and sold windows with a defect in the glazing flap that allowed water to enter and cause consequential damage. In April 2012, the judicial panel on multidistrict litigation transferred the actions to the District of South Carolina and assigned the ...


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