SMITH v. BAYER CORP.

Opinion of the Court

NOTICE: This opinion is subject to formal revision before publication in the
preliminary print of the United States Reports. Readers are requested to
notify the Reporter of Decisions, Supreme Court of the United States, Wash-
ington, D. C. 20543, of any typographical or other formal errors, in order
that corrections may be made before the preliminary print goes to press.

SUPREME COURT OF THE UNITED STATES
_________________

No. 09–1205

_________________

KEITH SMITH, ET AL., PETITIONERS v. BAYER

CORPORATION

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE EIGHTH CIRCUIT

[June 16, 2011]

JUSTICE KAGAN delivered the opinion of the Court.*

In this case, a Federal District Court enjoined a state court from considering a plaintiff’s request to approve a class action. The District Court did so because it had earlier denied a motion to certify a class in a related case, brought by a different plaintiff against the same defendant alleging similar claims. The federal court thought its injunction appropriate to prevent relitigation of the issue it had decided.

We hold to the contrary. In issuing this order to a state court, the federal court exceeded its authority under the “relitigation exception” to the Anti-Injunction Act. That statutory provision permits a federal court to enjoin a state proceeding only in rare cases, when necessary to “protect or effectuate [the federal court’s] judgments.” 28 U. S. C. §2283. Here, that standard was not met for two reasons. First, the issue presented in the state court was not identical to the one decided in the federal tribunal. And second, the plaintiff in the state court did not have the requisite connection to the federal suit to be bound by the District Court’s judgment.

I

Because the question before us involves the effect of a former adjudication on this case, we begin our statement of the facts not with this lawsuit, but with another. In August 2001, George McCollins sued respondent Bayer Corporation in the Circuit Court of Cabell County, West Virginia, asserting various state-law claims arising from Bayer’s sale of an allegedly hazardous prescription drug called Baycol (which Bayer withdrew from the market that same month). McCollins contended that Bayer had violated West Virginia’s consumer-protection statute and the company’s express and implied warranties by selling him a defective product. And pursuant to West Virginia Rule of Civil Procedure 23 (2011), McCollins asked the state court to certify a class of West Virginia residents who had also purchased Baycol, so that the case could proceed as a class action.

Approximately one month later, the suit now before us began in a different part of West Virginia. Petitioners Keith Smith and Shirley Sperlazza (Smith for short) filed state-law claims against Bayer, similar to those raised in McCollins’ suit, in the Circuit Court of Brooke County, West Virginia. And like McCollins, Smith asked the court to certify under West Virginia’s Rule 23 a class of Baycol purchasers residing in the State. Neither Smith nor McCollins knew about the other’s suit.

In January 2002, Bayer removed McCollins’ case to the United States District Court for the Southern District of West Virginia on the basis of diversity jurisdiction. See 28 U. S. C. §§1332, 1441. The case was then transferred to the District of Minnesota pursuant to a preexisting order of the Judicial Panel on Multi-District Litigation, which had consolidated all federal suits involving Baycol (numbering in the tens of thousands) before a single District Court Judge. See §1407. Bayer, however, could not remove Smith’s case to federal court because Smith had sued several West Virginia defendants in addition to Bayer, and so the suit lacked complete diversity. See §1441(b).1 Smith’s suit thus remained in the state courthouse in Brooke County.

Over the next six years, the two cases proceeded along their separate pretrial paths at roughly the same pace. By 2008, both courts were preparing to turn to their respective plaintiffs’ motions for class certification. The Federal District Court was the first to reach a decision.

Applying Federal Rule of Civil Procedure 23,2 the District Court declined to certify McCollins’ proposed class of West Virginia Baycol purchasers. The District Court’s reasoning proceeded in two steps. The court first ruled that, under West Virginia law, each plaintiff would have to prove “actual injury” from his use of Baycol to recover. App. to Pet. for Cert. 44a. The court then held that because the necessary showing of harm would vary from plaintiff to plaintiff, “individual issues of fact predominate[d]” over issues common to all members of the proposed class, and so the case was not suitable for class treatment. Id., at 45a. In the same order, the District Court also dismissed McCollins’ claims on the merits in light of his failure to demonstrate physical injury from his use of Baycol. McCollins chose not to appeal.

Although McCollins’ suit was now concluded, Bayer asked the District Court for another order based upon it, this one affecting Smith’s case in West Virginia. In a motion—receipt of which first apprised Smith of McCollins’ suit—Bayer explained that the proposed class in Smith’s case was identical to the one the federal court had just rejected. Bayer therefore requested that the federal court enjoin the West Virginia state court from hearing Smith’s motion to certify a class. According to Bayer, that order was appropriate to protect the District Court’s judgment in McCollins’ suit denying class certification. The District Court agreed and granted the injunction.

The Court of Appeals for the Eighth Circuit affirmed. In re Baycol Prods. Litigation, 593 F. 3d 716 (2010). The court noted that the Anti-Injunction Act generally prohibits federal courts from enjoining state court proceedings. But the court held that the Act’s relitigation exception authorized the injunction here because ordinary rules of issue preclusion barred Smith from seeking certification of his proposed class. According to the court, Smith was invoking a similar class action rule as McCollins had used to seek certification “of the same class” in a suit alleging “the same legal theories,” id., at 724; the issue in the state court therefore was “sufficiently identical” to the one the federal court had decided to warrant preclusion, ibid. In addition, the court held, the parties in the two proceedings were sufficiently alike: Because Smith was an unnamed member of the class McCollins had proposed, and because their “interests were aligned,” Smith was appropriately bound by the federal court’s judgment. Ibid.

We granted certiorari, 561 U. S. __ (2010), because the order issued here implicates two circuit splits arising from application of the Anti-Injunction Act’s relitigation exception. The first involves the requirement of preclusion law that a subsequent suit raise the “same issue” as a previous case.3 The second concerns the scope of the rule that a court’s judgment cannot bind nonparties.4 We think the District Court erred on both grounds when it granted the injunction, and we now reverse.

II

The Anti-Injunction Act, first enacted in 1793, provides that “A court of the United States may not grant an injunction to stay proceedings in a State court except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments.” 28 U. S. C. §2283. The statute, we have recognized, “is a necessary concomitant of the Framers’ decision to authorize, and Congress’ decision to implement, a dual system of federal and state courts.” Chick Kam Choo v. Exxon Corp., 486 U. S. 140, 146 (1988). And the Act’s core message is one of respect for state courts. The Act broadly commands that those tribunals “shall remain free from interference by federal courts.” Atlantic Coast Line R. Co. v. Locomotive Engineers, 398 U. S. 281, 282 (1970). That edict is subject to only “three specifically defined exceptions.” Id., at 286. And those exceptions, though designed for important purposes, “are narrow and are ‘not [to] be enlarged by loose statutory construction.’ ” Chick Kam Choo, 486 U. S., at 146 (quoting Atlantic Coast Line, 398 U. S., at 287; alteration in original). Indeed, “[a]ny doubts as to the propriety of a federal injunction against state court proceedings should be resolved in favor of permitting the state courts to proceed.” Id., at 297.

This case involves the last of the Act’s three exceptions, known as the relitigation exception. That exception is designed to implement “well-recognized concepts” of claim and issue preclusion. Chick Kam Choo, 486 U. S., at 147. The provision authorizes an injunction to prevent state litigation of a claim or issue “that previously was presented to and decided by the federal court.” Ibid. But in applying this exception, we have taken special care to keep it “strict and narrow.” Id., at 148. After all, a court does not usually “get to dictate to other courts the preclusion consequences of its own judgment.” 18 C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure §4405, p. 82 (2d ed. 2002) (hereinafter Wright & Miller). Deciding whether and how prior litigation has preclusive effect is usually the bailiwick of the second court (here, the one in West Virginia). So issuing an injunction under the relitigation exception is resorting to heavy artillery.5 For that reason, every benefit of the doubt goes toward the state court, see Atlantic Coast Line, 398 U. S., at 287, 297; an injunction can issue only if preclusion is clear beyond peradventure.

The question here is whether the federal court’s rejection of McCollins’ proposed class precluded a later adjudication in state court of Smith’s certification motion. For the federal court’s determination of the class issue to have this preclusive effect, at least two conditions must be met.6 First, the issue the federal court decided must be the same as the one presented in the state tribunal. See 18 Wright & Miller §4417, at 412. And second, Smith must have been a party to the federal suit, or else must fall within one of a few discrete exceptions to the general rule against binding nonparties. See 18A id., §4449, at 330. In fact, as we will explain, the issues before the two courts were not the same, and Smith was neither a party nor the exceptional kind of nonparty who can be bound. So the courts below erred in finding the certification issue precluded, and erred all the more in thinking an injunction appropriate.7 A

In our most recent case on the relitigation exception, Chick Kam Choo v. Exxon, we applied the “same issue” requirement of preclusion law to invalidate a federal court’s injunction. 486 U. S., at 151. The federal court had dismissed a suit involving Singapore law on grounds of forum non conveniens. After the plaintiff brought the same claim in Texas state court, the federal court issued an injunction barring the plaintiff from pursuing relief in that alternate forum. We held that the District Court had gone too far. “[A]n essential prerequisite for applying the relitigation exception,” we explained, “is that the . . . issues which the federal injunction insulates from litigation in state proceedings actually have been decided by the federal court.” Id., at 148. That prerequisite, we thought, was not satisfied because the issue to be adjudicated in state court was not the one the federal court had resolved. The federal court had considered the permissibility of the claim under federal forum non conveniens principles. But the Texas courts, we thought, “would apply a significantly different forum non conveniens analysis,” id., at 149; they had in prior cases rejected the strictness of the federal doctrine. Our conclusion followed: “[W]hether the Texas state courts are an appropriate forum for [the plaintiff’s] Singapore law claims has not yet been litigated.” Ibid. Because the legal standards in the two courts differed, the issues before the courts differed, and an injunction was unwarranted.

The question here closely resembles the one in Chick Kam Choo. The class Smith proposed in state court mirrored the class McCollins sought to certify in federal court: Both included all Baycol purchasers resident in West Virginia. Moreover, the substantive claims in the two suits broadly overlapped: Both complaints alleged that Bayer had sold a defective product in violation of the State’s consumer protection law and the company’s warranties. So far, so good for preclusion. But not so fast: a critical question—the question of the applicable legal standard—remains. The District Court ruled that the proposed class did not meet the requirements of Federal Rule 23 (because individualized issues would predominate over common ones). But the state court was poised to consider whether the proposed class satisfied West Virginia Rule 23. If those two legal standards differ (as federal and state forum non conveniens law differed in Chick Kam Choo)—then the federal court resolved an issue not before the state court. In that event, much like in Chick Kam Choo, “whether the [West Virginia] state cour[t]” should certify the proposed class action “has not yet been litigated.” 486 U. S., at 149.

The Court of Appeals and Smith offer us two competing ways of deciding whether the West Virginia and Federal Rules differ, but we think the right path lies somewhere in the middle. The Eighth Circuit relied almost exclusively on the near-identity of the two Rules’ texts. See 593 F. 3d, at 723. That was the right place to start, but not to end. Federal and state courts, after all, can and do apply identically worded procedural provisions in widely varying ways. If a State’s procedural provision tracks the language of a Federal Rule, but a state court interprets that provision in a manner federal courts have not, then the state court is using a different standard and thus deciding a different issue. See 18 Wright & Miller §4417, at 454 (stating that preclusion is “inappropriate” when “different legal standards . . . masquerad[e] behind similar legal labels”). At the other extreme, Smith contends that the source of law is all that matters: a different sovereign must in each and every case “have the opportunity, if it chooses, to construe its procedural rule differently.” Brief for Petitioners 22 (quoting ALI, Principles of the Law, Aggregate Litigation §2.11, Reporters’ Notes, cmt. b, p. 181 (2010)). But if state courts have made crystal clear that they follow the same approach as the federal court applied, we see no need to ignore that determination; in that event, the issues in the two cases would indeed be the same. So a federal court considering whether the relitigation exception applies should examine whether state law parallels its federal counterpart. But as suggested earlier, see supra, at 6, the federal court must resolve any uncertainty on that score by leaving the question of preclusion to the state courts.

Under this approach, the West Virginia Supreme Court has gone some way toward resolving the matter before us by declaring its independence from federal courts’ interpretation of the Federal Rules—and particularly of Rule 23. In In re W. Va. Rezulin Litigation, 214 W. Va. 52, 585 S. E. 2d 52 (2003) (In re Rezulin), the West Virginia high court considered a plaintiff’s motion to certify a class— coincidentally enough, in a suit about an allegedly defective pharmaceutical product. The court made a point of complaining about the parties’ and lower court’s nearexclusive reliance on federal cases about Federal Rule 23 to decide the certification question. Such cases, the court cautioned, “ ‘may be persuasive, but [they are] not binding or controlling.’ ” Id., at 61, 585 S. E. 2d, at 61. And lest anyone mistake the import of this message, the court went on: The aim of “this rule is to avoid having our legal analysis of our Rules ‘amount to nothing more than Pavlovian responses to federal decisional law.’ ” Ibid. (italics omitted). Of course, the state courts might still have adopted an approach to their Rule 23 that tracked the analysis the federal court used in McCollins’ case. But absent clear evidence that the state courts had done so, we could not conclude that they would interpret their Rule in the same way. And if that is so, we could not tell whether the certification issues in the state and federal courts were the same. That uncertainty would preclude an injunction.

But here the case against an injunction is even stronger, because the West Virginia Supreme Court has disapproved the approach to Rule 23(b)(3)’s predominance requirement that the Federal District Court embraced. Recall that the federal court held that the presence of a single individualized issue—injury from the use of Baycol—prevented class certification. See supra, at 3. The court did not identify the common issues in the case; nor did it balance these common issues against the need to prove individual injury to determine which predominated. The court instead applied a strict test barring class treatment when proof of each plaintiff’s injury is necessary.8 By contrast, the West Virginia Supreme Court in In re Rezulin adopted an all-things-considered, balancing inquiry in interpreting its Rule 23. Rejecting any “rigid test,” the state court opined that the predominance requirement “contemplates a review of many factors.” 214 W. Va., at 72, 585 S. E. 2d, at 72. Indeed, the court noted, a “ ‘single common issue’ ” in a case could outweigh “ ‘numerous . . . individual questions.’ ” Ibid. That meant, the court further explained (quoting what it termed the “leading treatise” on the subject), that even objections to certification “ ‘based on . . . causation, or reliance’ ”—which typically involve showings of individual injury—“ ‘will not bar predominance satisfaction.’ ” Ibid. (quoting 2 A. Conte & H. Newberg, Newberg on Class Actions §4.26, p. 241 (4th ed. 2002)). So point for point, the analysis set out in In re Rezulin diverged from the District Court’s interpretation of Federal Rule 23. A state court using the In re Rezulin standard would decide a different question than the one the federal court had earlier resolved.9

This case, indeed, is little more than a rerun of Chick Kam Choo. A federal court and a state court apply different law. That means they decide distinct questions. The federal court’s resolution of one issue does not preclude the state court’s determination of another. It then goes without saying that the federal court may not issue an injunction. The Anti-Injunction Act’s re-litigation exception does not extend nearly so far.

B

The injunction issued here runs into another basic premise of preclusion law: A court’s judgment binds only the parties to a suit, subject to a handful of discrete and limited exceptions. See, e.g., 18A Wright & Miller §4449, at 330. The importance of this rule and the narrowness of its exceptions go hand in hand. We have repeatedly “emphasize[d] the fundamental nature of the general rule” that only parties can be bound by prior judgments; accordingly, we have taken a “constrained approach to nonparty preclusion.” Taylor v. Sturgell, 553 U. S. 880, 898 (2008). Against this backdrop, Bayer defends the decision below by arguing that Smith—an unnamed member of a proposed but uncertified class—qualifies as a party to the McCollins litigation. See Brief for Respondent 32–34. Alternatively, Bayer claims that the District Court’s judgment binds Smith under the recognized exception to the rule against nonparty preclusion for members of class actions. See id., at 34–39. We think neither contention has merit.

Bayer’s first claim ill-comports with any proper understanding of what a “party” is. In general, “[a] ‘party’ to litigation is ‘[o]ne by or against whom a lawsuit is brought,’ ” United States ex rel. Eisenstein v. City of New York, 556 U. S. ___, ___ (2009) (slip op., at 4), or one who “become[s] a party by intervention, substitution, or thirdparty practice,” Karcher v. May, 484 U. S. 72, 77 (1987). And we have further held that an unnamed member of a certified class may be “considered a ‘party’ for the [particular] purpos[e] of appealing” an adverse judgment. Devlin v. Scardelletti, 536 U. S. 1, 7 (2002). But as the dissent in Devlin noted, no one in that case was “willing to advance the novel and surely erroneous argument that a nonnamed class member is a party to the class-action litigation before the class is certified.” Id., at 16, n. 1 (opinion of SCALIA, J.). Still less does that argument make sense once certification is denied. The definition of the term “party” can on no account be stretched so far as to cover a person like Smith, whom the plaintiff in a lawsuit was denied leave to represent.10 If the judgment in the McCollins litigation can indeed bind Smith, it must do so under principles of nonparty preclusion.

As Bayer notes, see Brief for Respondent 37, one such principle allows unnamed members of a class action to be bound, even though they are not parties to the suit. See Cooper v. Federal Reserve Bank of Richmond, 467 U. S. 867, 874 (1984) (“[U]nder elementary principles of prior adjudication a judgment in a properly entertained class action is binding on class members in any subsequent litigation”); see also Taylor, 553 U. S., at 894 (stating that nonparties can be bound in “properly conducted class actions”). But here Bayer faces a conundrum. If we know one thing about the McCollins suit, we know that it was not a class action. Indeed, the very ruling that Bayer argues ought to be given preclusive effect is the District Court’s decision that a class could not properly be certified. So Bayer wants to bind Smith as a member of a class action (because it is only as such that a nonparty in Smith’s situation can be bound) to a determination that there could not be a class action. And if the logic of that position is not immediately transparent, here is Bayer’s attempt to clarify: “[U]ntil the moment when class certification was denied, the McCollins case was a properly conducted class action.” Brief for Respondent 37. That is true, according to Bayer, because McCollins’ interests were aligned with the members of the class he proposed and he “act[ed] in a representative capacity when he sought class certification.” Id., at 36.

But wishing does not make it so. McCollins sought class certification, but he failed to obtain that result. Because the District Court found that individual issues predominated, it held that the action did not satisfy Federal Rule 23’s requirements for class proceedings. In these circumstances, we cannot say that a properly conducted class action existed at any time in the litigation. Federal Rule 23 determines what is and is not a class action in federal court, where McCollins brought his suit. So in the absence of a certification under that Rule, the precondition for binding Smith was not met. Neither a proposed class action nor a rejected class action may bind nonparties. What does have this effect is a class action approved under Rule 23. But McCollins’ lawsuit was never that.

We made essentially these same points in Taylor v. Sturgell just a few Terms ago. The question there concerned the propriety of binding nonparties under a theory of “virtual representation” based on “identity of interests and some kind of relationship between parties and nonparties.” 553 U. S., at 901. We rejected the theory unanimously, explaining that it “would ‘recogniz[e], in effect, a common-law kind of class action.’ ” Ibid. Such a device, we objected, would authorize preclusion “shorn of [Rule 23’s] procedural protections.” Ibid. Or as otherwise stated in the opinion: We could not allow “circumvent[ion]” of Rule 23’s protections through a “virtual representation doctrine that allowed courts to ‘create de facto class actions at will.’ ” Ibid. We could hardly have been more clear that a “properly conducted class action,” with binding effect on nonparties, can come about in federal courts in just one way—through the procedure set out in Rule 23. Bayer attempts to distinguish Taylor by noting that the party in the prior litigation there did not propose a class action. But we do not see why that difference matters. Yes, McCollins wished to represent a class, and made a motion to that effect. But it did not come to pass. To allow McCollins’ suit to bind nonparties would be to adopt the very theory Taylor rejected.11

Bayer’s strongest argument comes not from established principles of preclusion, but instead from policy concerns relating to use of the class action device. Bayer warns that under our approach class counsel can repeatedly try to certify the same class “by the simple expedient of changing the named plaintiff in the caption of the complaint.” Brief for Respondent 47–48. And in this world of “serial relitigation of class certification,” Bayer contends, defendants “would be forced in effect to buy litigation peace by settling.” Id., at 2, 12; see also In re Bridgestone/Firestone, Inc., Tires Prods. Liability Litigation, 333 F. 3d 763, 767 (CA7 2003) (objecting to an “an asymmetric system in which class counsel can win but never lose” because of their ability to relitigate the issue of certification).

But this form of argument flies in the face of the rule against nonparty preclusion. That rule perforce leads to relitigation of many issues, as plaintiff after plaintiff after plaintiff (none precluded by the last judgment because none a party to the last suit) tries his hand at establishing some legal principle or obtaining some grant of relief. We confronted a similar policy concern in Taylor, which involved litigation brought under the Freedom of Information Act (FOIA). The Government there cautioned that unless we bound nonparties a “ ‘potentially limitless’ ” number of plaintiffs, perhaps coordinating with each other, could “mount a series of repetitive lawsuits” demanding the selfsame documents. 553 U. S., at 903. But we rejected this argument, even though the payoff in a single successful FOIA suit—disclosure of documents to the public—could “trum[p]” or “subsum[e]” all prior losses, just as a single successful class certification motion could do. In re Bridgestone/Firestone, 333 F. 3d, at 766, 767. As that response suggests, our legal system generally relies on principles of stare decisis and comity among courts to mitigate the sometimes substantial costs of similar litigation brought by different plaintiffs. We have not thought that the right approach (except in the discrete categories of cases we have recognized) lies in binding nonparties to a judgment.

And to the extent class actions raise special problems of relitigation, Congress has provided a remedy that does not involve departing from the usual rules of preclusion. In the Class Action Fairness Act of 2005 (CAFA), 28 U. S. C. §§1332(d), 1453 (2006 ed. and Supp. III), Congress enabled defendants to remove to federal court any sizable class action involving minimal diversity of citizenship. Once removal takes place, Federal Rule 23 governs certification. And federal courts may consolidate multiple overlapping suits against a single defendant in one court (as the Judicial Panel on Multi-District Litigation did for the many actions involving Baycol). See §1407. Finally, we would expect federal courts to apply principles of comity to each other’s class certification decisions when addressing a common dispute. See, e.g., Cortez Byrd Chips, Inc. v. Bill Harbert Constr. Co., 529 U. S. 193, 198 (2000) (citing Landis v. North American Co., 299 U. S. 248, 254 (1936)). CAFA may be cold comfort to Bayer with respect to suits like this one beginning before its enactment. But Congress’s decision to address the relitigation concerns associated with class actions through the mechanism of removal provides yet another reason for federal courts to adhere in this context to longstanding principles of preclusion.12 And once again, that is especially so when the federal court is deciding whether to go so far as to enjoin a state proceeding.

* * *

The Anti-Injunction Act prohibits the order the District Court entered here. The Act’s relitigation exception authorizes injunctions only when a former federal adjudication clearly precludes a state-court decision. As we said more than 40 years ago, and have consistently maintained since that time, “[a]ny doubts . . . should be resolved in favor of permitting the state courts to proceed.” Atlantic Coast Line, 398 U. S., at 297. Under this approach, close cases have easy answers: The federal court should not issue an injunction, and the state court should decide the preclusion question. But this case does not even strike us as close. The issues in the federal and state lawsuits differed because the relevant legal standards differed. And the mere proposal of a class in the federal action could not bind persons who were not parties there. For these reasons, the judgment of the Court of Appeals is Reversed.

* JUSTICE THOMAS joins Parts I and II–A of this opinion.

1 The Class Action Fairness Act of 2005, 119 Stat. 4, which postdates and therefore does not govern this lawsuit, now enables a defendant to remove to federal court certain class actions involving nondiverse parties. See 28 U. S. C. §§1332(d), 1453(b); see also infra, at 17.

2 Although McCollins had originally sought certification under West Virginia Rule of Civil Procedure 23 (2011), federal procedural rules govern a case that has been removed to federal court. See Shady Grove Orthopedic Associates, P. A. v. Allstate Ins. Co., 559 U. S. ___ (2010).

3 Compare In re Baycol Prods. Litigation, 593 F. 3d 716, 723 (CA8 2010) (case below) (holding that two cases involve the same issue when “[t]he state and federal [class] certification rules . . . are not significantly different”), with J. R. Clearwater Inc. v. Ashland Chemical Co., 93 F. 3d 176, 180 (CA5 1996) (holding that two cases implicate different issues even when “[the state rule] is modeled on . . . the Federal Rules” because a “[state] court might well exercise [its] discretion in a different manner”).

4 Compare 593 F. 3d, at 724 (“[T]he denial of class certification is binding on unnamed [putative] class members” because they are “in privity to [the parties] in the prior action”) and In re Bridgestone/Firestone, Inc., Tires Prods. Liability Litigation, 333 F. 3d 763, 768–769 (CA7 2003) (same), with In re Ford Motor Co., 471 F. 3d 1233, 1245 (CA11 2006) (holding that “[t]he denial of class certification” prevents a court from “binding” anyone other than “the parties appearing before it”) and In re General Motors Corp. Pick-Up Truck Fuel Tank Prods. Liability Litigation, 134 F. 3d 133, 141 (CA3 1998) (holding that putative “class members are not parties” and so cannot be bound by a court’s ruling when “there is no class pending”).

5 That is especially so because an injunction is not the only way to correct a state trial court’s erroneous refusal to give preclusive effect to a federal judgment. As we have noted before, “the state appellate courts and ultimately this Court” can review and reverse such a ruling. See Atlantic Coast Line R. Co. v. Locomotive Engineers, 398 U. S. 281, 287 (1970).

6 We have held that federal common law governs the preclusive effect of a decision of a federal court sitting in diversity. See Semtek Int’l Inc. v. Lockheed Martin Corp., 531 U. S. 497, 508 (2001). Smith assumes that federal common law should here incorporate West Virginia’s preclusion law, see Brief for Petitioners 15–16, whereas Bayer favors looking only to federal rules of preclusion because of the federal interests at stake in this case, see Brief for Respondent 18. We do not think the question matters here. Neither party identifies any way in which federal and state principles of preclusion law differ in any relevant respect. Nor have we found any such divergence. Compare, e.g., Montana v. United States, 440 U. S. 147, 153–154 (1979) (describing elements of issue preclusion), with State v. Miller, 194 W. Va. 3, 9, 459 S. E. 2d 114, 120 (1995) (same). We therefore need not decide whether, in general, federal common law ought to incorporate state law in situations such as this.

7 Because we rest our decision on the Anti-Injunction Act and the principles of issue preclusion that inform it, we do not consider Smith’s argument, based on Phillips Petroleum Co. v. Shutts, 472 U. S. 797 (1985), that the District Court’s action violated the Due Process Clause.

8 The District Court’s approach to the predominance inquiry is consistent with the approach employed by the Eighth Circuit. See In re St. Jude Medical, Inc., 522 F. 3d 836, 837–840 (2008) (holding that most commercial misrepresentation cases are “unsuitable for class treatment” because individual issues of reliance necessarily predominate). We express no opinion as to the correctness of this approach.

9 Bayer argues that In re Rezulin does not preclude an injunction in this case because the West Virginia court there decided that common issues predominated over individual issues of damages, not over individual issues of liability (as exist here). See Brief for Respondent 25– 26. We think Bayer is right about this distinction, but wrong about its consequence. Our point is not that In re Rezulin dictates the answer to the class certification question here; the two cases are indeed too dissimilar for that to be true. The point instead is that In re Rezulin articulated a general approach to the predominance requirement that differs markedly from the one the federal court used. Minor variations in the application of what is in essence the same legal standard do not defeat preclusion; but where, as here, the State’s courts “would apply a significantly different . . . analysis,” Chick Kam Choo v. Exxon Corp., 486 U. S. 140, 149 (1988), the federal and state courts decide different issues.

10 In support of its claim that Smith counts as a party, Bayer cites two cases in which we held that a putative member of an uncertified class may wait until after the court rules on the certification motion to file an individual claim or move to intervene in the suit. See Brief for Respondent 32–33 (citing United Airlines, Inc. v. McDonald, 432 U. S. 385 (1977); American Pipe & Constr. Co. v. Utah, 414 U. S. 538 (1974)). But these cases, which were specifically grounded in policies of judicial administration, demonstrate only that a person not a party to a class suit may receive certain benefits (such as the tolling of a limitations period) related to that proceeding. See id., at 553; McDonald, 432 U. S., at 394, n. 15. That result is consistent with a commonplace of preclusion law—that nonparties sometimes may benefit from, even though they cannot be bound by, former litigation. See Parklane Hosiery Co. v. Shore, 439 U. S. 322, 326–333 (1979); Blonder-Tongue Laboratories, Inc. v. University of Ill. Foundation, 402 U. S. 313 (1971).

11 The great weight of scholarly authority—from the Restatement of Judgments to the American Law Institute to Wright and Miller— agrees that an uncertified class action cannot bind proposed class members. See Restatement (Second) of Judgments §41(1), p. 393 (1980) (A nonparty may be bound only when his interests are adequately represented by “[t]he representative of a class of persons similarly situated, designated as such with the approval of the court”); ALI, Principles of the Law Aggregate Litigation §2.11, Reporters’ Notes, cmt. b, p. 181 (2010) (“[N]one of [the exceptions to the rule against nonparty preclusion] extend generally to the situation of a would-be absent class member with respect to a denial of class certification”); 18A Wright & Miller §4455, at 457–458 (“[A]bsent certification there is no basis for precluding a nonparty” under the class-action exception).

12 By the same token, nothing in our holding today forecloses legislation to modify established principles of preclusion should Congress decide that CAFA does not sufficiently prevent relitigation of class certification motions. Nor does this opinion at all address the permissibility of a change in the Federal Rules of Civil Procedure pertaining to this question. Cf. n. 7, supra (declining to reach Smith’s due process claim).

Print this transcript Transcript: 

ORAL ARGUMENT OF RICHARD A. MONAHAN ON BEHALF OF PETITIONERS

Chief Justice John G. Roberts: We will hear argument next this morning in case 09-1205, Smith versus Bayer Corporation.

Mr. Monahan.

Mr. Monahan: Mr. Chief Justice, and may it please the Court:

Petitioners Keith Smith and Shirley Sperlazza were not named plaintiffs in the prior Federal proceeding litigated by George McCollins.

They never received notice of that prior proceeding; they never received an opportunity to appear and be heard; they never received an opportunity to opt out; and they never received an opportunity to appeal the decision denied by certification.

No precedent of this Court would justify treating -- treating people as parties under preclusion principles under these circumstances.

Recently in Taylor v. Sturgell this Court addressed the rule against nonparty preclusion and discussed the recognized exceptions.

The Court in that case discussed a properly conducted class action as being one of the exceptions.

The Court in discussing these preclusion rules noted that they are limited by due process concerns, and the Court noted that the properly conducted class action is an exception due to the due process protections incorporated into Rule 23.

Obviously, this Court has discussed the due process protections with class actions in prior cases, particularly those dealing with 23(b)(3) classes in cases such as Eisen and Shutts.

The Court has noted that whenever a class is certified notice must be provided; the right to -- notice must be provided; they must have the right to appear and be heard in person or by counsel; they must have the right to opt out as well as protection of adequate representation.

Justice Samuel Alito: Well, suppose a class action based on diversity is filed in one of the Federal districts in West Virginia and the district court denies class certification.

The same plaintiff, the same plaintiff's attorney, takes the old complaint, writes in the name of the new named party, files exactly the same complaint in another Federal -- in the other Federal district in West Virginia.

Would your argument be the same?

That can go forward, get another shot at class certification?

Mr. Monahan: Your Honor, under the -- yes, under those circumstances, as outlined by -- by Your Honor.

Justice Ruth Bader Ginsburg: All you have to do is get a new named plaintiff?

Mr. Monahan: Yes, as long as it's not the same party.

If it's a different party--

Justice Ruth Bader Ginsburg: And it can be the same attorney?

Mr. Monahan: --Yes, it could be the same attorney.

This Court noted that in Taylor v. Sturgell, in South -- South Central Bell v. Alabama, and also as discussed in the Richards case.

Justice Ruth Bader Ginsburg: Would the -- would the decision that's saying -- saying Rule 23 standards have not been met, the individual issues predominate over the common issue -- doesn't that deserve some measure of respect when the same thing is tried again?

Mr. Monahan: Yes, Your Honor, but that would be under stare decisis principles, we believe, and that's the situation, since it is a different party, since it's not the same party itself.

And certainly the district courts in West Virginia would look to other district courts' opinions and would likely render them persuasive, or consider them persuasive, under those circumstances.

Justice Samuel Alito: But they have no obligation to follow another district court opinion, do they?

Mr. Monahan: Technically, no, Your Honor.

If the Fourth Circuit, for instance, had spoken on the matter, though, and it was something that was decided by the Fourth Circuit, or of course by this Court, then clearly they would.

Justice Ruth Bader Ginsburg: And this one was determined by the multidistrict panel, right?

Mr. Monahan: Yes.

Yes, a district judge in Minnesota.

Yes, Your Honor.

Interestingly, in Taylor, this Court noted that adopting a broad theory of virtual representation based upon an identity of interests, adequate representation, and a close relationship would -- would, in essence, be equivalent to adopting a de facto class action or recognizing a common law class action without any of the procedural due process protections provided by Rule 23.

Obviously, in dealing with these cases, the main reason a certification is -- the main reason the due process protections are provided upon certification is to go ahead and justify binding the class members to any judgment issued by the court at that point.

Until you have that, unless you have the certification and the due process protections for a Rule 23(b)(3) class, until you have those, the absent class members remain strangers to the proceeding.

Justice Ruth Bader Ginsburg: But the absent class members retain their individual right.

They are not being precluded as to their individual claim.

It's only they can't be a class representative.

Mr. Monahan: That's -- that's true, Your Honor.

We submit, however, that any procedural rights which have been recognized and adopted, those procedural rights, just as the substantive claim, itself, have to be adjudicated consistent with due process.

And West Virginia itself has adopted Rule 23 of the West Virginia Rules of Civil Procedure, and that State has the right to apply and interpret that rule as it sees fit to manage its own docket and administrate its own docket as it sees fit.

Justice Ruth Bader Ginsburg: Am I right to read the supplemental brief as saying that now, the West Virginia Supreme Court agrees with the multidistrict panel on what the content of West Virginia law is?

Mr. Monahan: That's not correct, Your Honor.

All of the issues raised in our petition for cert remain just as they were.

At worst, if White v. Wyatt withstands petition for rehearing, at worst we lose our CCPA claim.

That certainly is a valuable claim to us.

I will not dispute that.

But we also have a common law fraud claim.

We also have breach of warranty claims, and those are still in existence.

And the critical fact of this case in that regard is, the question of whether or not a class may be certified under West Virginia Rules of Civil Procedure has never been litigated, has never been decided by any court.

Justice Elena Kagan: Well, Mr. Monahan, do you mean by that that you would have a blanket rule that a decision on Federal Rule of Civil Procedure 23 can never be preclusive as to a State Rule of Civil Procedure 23?

Mr. Monahan: Your Honor, I believe it would depend upon whether or not that State has said that not only are we going to look at these Federal decisions as being persuasive, but we're going to consider ourself bound by the decisions of the Fourth Circuit or the United States District Court for the Southern District of West Virginia.

Justice Elena Kagan: Well, suppose the State says: We will not consider ourselves bound; we do have our own law with respect to Rule 23, but sometimes we'll go along with the Federal rule and sometimes we won't.

Is it then up to the courts to actually try to determine whether the -- the West Virginia court in this case would have gone along, would have interpreted its own rule of civil procedure the same way that the Federal Court interpreted the Federal rule?

Mr. Monahan: Well, for instance, what Your Honor suggested is essentially what the West Virginia Supreme Court of Appeals does.

I mean, they will -- they will consider them to be persuasive.

They will consider them -- but in their In re Rezulin case, the court noted -- the court actually criticized the circuit judge for relying exclusively on Federal decisions denying class certification in medical device or prescription drug cases.

And the court noted that, you know, although we will look at those rules and they may be persuasive, they are not binding or controlling on us, and that is because we do not want our legal analysis to be nothing more than a mere Pavlovian response to Federal decisional rules.

Justice Samuel Alito: What is -- what is the difference between the Federal law and the West Virginia law on the class certification issue?

Not the application to this particular complaint, but as to the -- the standard.

What do you see as the difference between the Federal standard and the West Virginia standard?

Mr. Monahan: The main difference, Justice Alito, is that our court has -- and they cite this in In re Rezulin, for instance.

They cite Neuberger on Class Actions as one of the authorities to support this principle, but they note that in -- in our court that normally challenges based upon reliance, causation, and damages will not bar certification on a predominance basis, because those go to the right of the individual to recover, but not to the overall liability issues of the defendant, which it believes can be addressed as common issues in many cases and save the court an extreme amount of time addressing those common issues.

Now, the court indicates that if individual trials need to be conducted later on, on any of those issues, if there are truly individual issues that need to be resolved concerning those claims, individual trials can be accomplished.

Justice Sonia Sotomayor: On the ground that the court here, the Federal court, decided that they weren't predominant issues based mostly on the fact that, like the Virginia court has now, it's decided that there is no economic loss, what were the differences?

What were the differences here?

How would the difference in standard play out here?

Mr. Monahan: Well, for instance -- and this is an interesting aspect of this case -- the court's not only trying to bind us on the procedural ruling, but is also trying to bind us in a substantive ruling as to what the elements of the claims in West Virginia are and as to what's needed to prove those claims.

For instance, the Eighth Circuit has -- has held that in looking at the district court's opinion, that it has held that an actual physical injury is required, but economic loss alone is not enough.

Clearly, that's not consistent with West Virginia law.

An economic loss alone can be sufficient.

In West--

Justice Sonia Sotomayor: The -- I'm sorry.

I don't mean to cut you off, but you're really arguing that due process requires the same treatment, essentially, of notice and an opportunity to be heard that we are giving to a substantive decision that blocks a future member from pursuing his or her claim, correct?

Mr. Monahan: --Yes, very similar, Your Honor.

I mean, in this circumstance -- I mean, these rights are provided.

These procedural rights, once they are created, are being provided, and they can't be taken away without due process.

West Virginia has recognized the right to -- to proceed in our court under our rule, and not -- you don't have to guarantee--

Justice Sonia Sotomayor: You're almost treating it as a property right, and -- and you're basically saying we're equating it with, essentially, a property right.

Mr. Monahan: --Well, I think -- I think what I'm trying to say, Your Honor, is that these type of procedural rights -- whenever you have a substantive claim, which is a property right, and you seek to litigate them, you shall have available to you all the Rules of Civil Procedure which have been adopted and recognized, and those procedural elements of the claim should be treated or adjudicated just the same as a substantive claim, consistent with due process--

Justice Sonia Sotomayor: If we disagree with you, because there is a difference of some sort between procedure and substantive rights, then what would command the due process violation in a situation in which the Federal litigation has applied essentially the same standard that the State has and there has been adequate representation on the procedural question, where no substantive right of a plaintiff has been extinguished?

That's a lot of conditions, but those are the three conditions of this case.

So what in due process requires that outcome, your outcome?

Mr. Monahan: --I believe that the basic -- because we are not the same party, we believe the basic elements are just the notice and the right to be heard, which our party has never had.

May I--

Justice Sonia Sotomayor: You're extinguishing a substantive right?

Return to my question of what makes a procedural right substantive.

Mr. Monahan: --Well, this particular procedural right is very closely connected -- I mean, one of the main purposes of a class action is to level the economic playing field and to enable people with small individual claims to aggregate them in order to seek justice.

Without those--

Justice Sonia Sotomayor: Actually not true.

The plaintiff here received the same thing.

The issue is how much money the lawyers are going to receive, really, because plaintiff gets their attorney's fees, gets a statutory violation amount, which is going to be the same whether it's in a class action or an individual action, so it's really not the plaintiff who stands to win.

Mr. Monahan: --No, Your Honor, what -- what -- the assumptions you just made I don't believe are correct in this -- in this particular case, because, one, obviously if we lose the CCPA claim in light of the White case, there would be no statutory attorney fees.

And even if we had the CCPA claim, it's -- the court has discretion, it may award them.

There's no requirement that it do so, no requirement whatsoever.

And how can anybody bring -- any lawyer trying to bring one of these small damage claims, if the damages are only $100, $200 per plaintiff, for instance, how could any lawyer justify facing a defendant such as Bayer in a complex product liability action?

Just the cost alone of having experts, of doing discovery, all those matters would greatly exceed the value of the claim itself.

So the class action is the only way in which to aggregate the claims and level the economic playing field for everybody.

The other thing, I would note for the common law fraud claim West Virginia does have a bad faith exception for attorney fees, but that depends on the degree of fraud that the Court finds, and that -- that in and of itself is discretionary.

Chief Justice John G. Roberts: What if -- how far does your procedural right extend?

Let's say in the second action the court says, look, we've been through all this before; we have had a million pages of discovery from the prior action, no protective order at all.

So while if you were the first person here, you're entitled to, you know, ten interrogatories, because we have been through this before, I'm going to say you can look at all the discovery that's there, but you only get five interrogatories.

Now, do you say no, no, no, I'm entitled to the same procedural rights I would have if I were here first?

Is that right?

Mr. Monahan: Your Honor, I think the court does have some flexibility, depending upon the procedural role at issue.

And in essence, the court is applying almost essentially the stare decisis type of principles there.

We have resolved this exact discovery issue before, the exact--

Chief Justice John G. Roberts: So now it's not only that you're entitled to your day in court substantively; you're -- you're entitled to your day in court procedurally as to some procedural aspects but not others?

Mr. Monahan: --Well, I certainly think the Court needs to examine the procedural aspect and its importance, and the part that it plays.

I mean, for instance, one of the problems we have in this situation is that normally res judicata and collateral estoppel do not normally apply to mere procedural rulings.

They're not normally used for that purpose.

Most cases where they are used for that purpose are cases where a dismissal has occurred based upon a procedural ruling or a procedural failing.

And whenever they apply collateral estoppel and res judicata, it's almost -- every case I have seen deals with the exact same party in another proceeding.

And there they preclude them.

But here it's a totally different party.

And the issue under West Virginia law has never been litigated by any court.

Justice Stephen G. Breyer: If a totally different party, if a person, say an intervenor, joins a litigation late, and there have been a lot of procedural rulings, I guess that that intervenor takes the case as he finds it?

He can go to the judge and say: Judge, I want you to reconsider your procedural ruling in light of the fact I'm here.

How does the situation I have just sketched differ from this one?

I mean, you have a client who's coming to the litigation late.

He's separate from the litigation, I know, but he could send a representative to the judge and say: Judge, I want you to reconsider in light of the fact I'm joining.

Now, I know I'm not joining; in fact, I'm bringing a different case.

But I'm thinking of the -- of the Chief Justice's hypo here and I'm -- and I'm trying to apply it.

And is your client analogous to that person who joins litigation late?

Mr. Monahan: No, Your Honor, because -- I mean, for instance, this Court has noted -- and they note it, I believe in the -- you noted it in the Richards case.

The Chase National Bank v. Norwalk and Martin v. Wilks has noted that a stranger to litigation has no duty to seek to intervene in the case; however, they can; they can seek to intervene if they have notice, if they so choose.

If you take that affirmative step to intervene, knowing what has happened in that case, you obviously have notice of the case because you're choosing to intervene.

And if you seek to intervene having that notice, then you take it as you find it.

Now, you can certainly ask the court to reconsider because you want to raise new arguments, but there would be no obligation to do so.

Justice Ruth Bader Ginsburg: Here you have a different forum; pick up a different plaintiff, and you go to a different forum.

How -- and I guess your answer is that you could go on and on and on until -- until maybe you find a judge who will certify this class.

Mr. Monahan: Your Honor, I don't -- I don't believe so.

I don't believe that's the case because there are limitations to that.

One would be, I think, if you filed at another Federal court, for instance, Rule 23 would be the same legal standard.

Federal Rule 23 is the same legal standard in all Federal courts.

Justice Ruth Bader Ginsburg: But we have a new plaintiff, so that plaintiff wouldn't have had notice and an opportunity to be -- to be heard.

Mr. Monahan: For preclusion purposes, that's correct.

But I think the Federal court certainly would look at those cases for stare decisis purposes and looking as to whether or not the class should be certified under the same legal standard.

Now, here we do have a different forum.

We have the State of West Virginia is a separate sovereign, has its own rights to do this.

But, once -- once -- if a class would be denied in West Virginia at one time, I believe that the chances of having another one succeed are very low, because courts will look to those stare decisis principles--

Justice Ruth Bader Ginsburg: Yes, but there are 50 States.

Mr. Monahan: --I'm sorry, Your Honor?

Justice Ruth Bader Ginsburg: There are 50 States.

And if the plaintiff was asking for a nationwide class action--

Mr. Monahan: Yes, Your Honor, and the issue with that, though, is this Court has -- in Taylor v. Sturgell, for instance, which Your Honor authored, the government argued in that case that, you know, we should adopt this virtual representation theory because of repetitive litigation.

We had this FOIA request.

Any person out there could file asking the government for these documents and the government may have to go on thousands of times, millions of times conceivably to do this.

And this Court note -- noted that the threat of repetitive litigation is not sufficient to justify adopting a new exception to the rule against nonparty preclusion.

Justice Samuel Alito: What kind of notice do you think due process would require?

If the court in which the case was first filed thought, I'm not going waste, I don't want to waste my time on this class certification issue if it's just going to be relitigated over and over and over again, so I want to provide sufficient notice so that the members of a class will be bound by my -- by my class certification issue, what -- what would have to be done?

Would they all have to be given individual notice and asked to opt out?

Mr. Monahan: Your Honor, I -- I believe so.

I believe -- I mean, consistent with Shutts, this Court's ruling in Shutts and Eisen, I think they would, because once they had the notice and that they would decide not to opt out, then they would be bound by any ruling that the -- that the court issues there.

But if -- if they don't have that opportunity, especially whenever -- and this case also involves the Anti-Injunction Act, of course, the principles of Federalism and comity, and any question under the Anti-Injunction Act, any doubt should go against issuing injunctions.

And the -- the exceptions to that Act are narrowly construed in light of principles of Federalism, and because we do have a separate State here and we're trying to apply or seek State relief and seek the State rules and follow the State rules, I do believe you would need the same notice that we have in Shutts, the notice, the opportunity to appear and the opportunity to opt out.

Now, certainly other issues -- if we're talking about policy concerns, another thing I would note is that in CAFA recently -- whenever Congress adopted CAFA, certainly if they believe that basing one -- using one class denial in Federal court as a basis to preclude all other similar classes seeking -- seeking certification, if they thought that was consistent with due process, certainly they could have considered adopting that as part of CAFA.

But they chose to deal with it in a very different way, a very different manner, and that was to go ahead and change the jurisdictional status and diversity cases, make minimal diversity and allow removal with certain -- certain exceptions for certain discretionary ones, stay at home and local controversy exceptions, but they didn't -- I mean, that's how they chose to deal with it.

Now, certainly we would admit that since CAFA has been enacted, the chance -- certainly there's not nearly as many of these cases which will occur where this will be an issue, because many large classes now will get removed.

Justice Elena Kagan: When -- when Congress enacted CAFA, did Congress think about this precise issue, the issue that Justice Ginsburg is raising about a lawyer going from State to State with a different named plaintiff?

Was that -- was that part of what Congress was reacting to?

Mr. Monahan: Yes, Justice Kagan, it's my understanding that that was something they were concerned about.

They were concerned about, again, some States being too permissive in granting class certifications, and they were worried about some of those same factors.

But, you know, one of the primary concerns on all -- in CAFA itself, though, was protecting the absent class members' rights, and this Court's noted those same rights in Amchem and Ortiz, many of its cases, your cases, you've noted that that's a principle concern.

And this Court has heightened the standard in those class -- class settlement certifications for the court to make sure that each and every element and requirement is met, to ensure that -- that the settlement itself is fair to all class members, including the absent class members, and that, you know -- and that the attorney fees are fair.

Justice Samuel Alito: Wouldn't it be a violation -- wouldn't it be a violation of due process if Congress enacted a statute or if there were a rule adopted that said that the first ruling on class certification by a Federal court binds all members of the class in any other Federal litigation?

Would that be a -- they would retain their individual claims, but there could not be another -- another class action -- another class action filed.

Would that be a due process violation?

Mr. Monahan: In all other Federal cases, I believe that that might survive a due process challenge; because you're limiting it to the same legal standard in those cases.

I -- certainly I think because it would be applying those -- to absent class members who were not truly parties, I believe some of those due process concerns could be raised.

But you certainly would not have the elements of the Federalism, you would not have the different legal standard that we have with State courts applying their own rules.

Justice Samuel Alito: Well, is there a due process right to have class action?

Mr. Monahan: Your Honor, this Court has noted a procedural right to seek class certification.

There is no right to have one.

We have to meet the requirements.

Justice Samuel Alito: What if Congress just decided to get rid of class actions altogether?

Would that be unconstitutional?

Mr. Monahan: Your Honor, I -- certainly would hope that they would provide notice and an opportunity for people to come and make their arguments and to argue both sides of the question.

But, no, I don't believe so.

Justice Stephen G. Breyer: Did it ever happen, did you ever come across an instance before where in a Federal court a judge in a district court said, no, you can't have a certification, no; and then a different plaintiff went to a different Federal court in a different part of the country and asked for a similar certification?

Have you ever found anything like that in precedent, that it's in two Federal courts rather than the State?

Mr. Monahan: Yes, Your Honor.

I believe that maybe Thorogood, the recent Thorogood case out of the Seventh Circuit, might involve something similar to that.

Justice Stephen G. Breyer: And did they say -- did they say in -- in that case that the second judge is bound as a matter of stare decisis, or is he bound as a matter of collateral estoppel?

Mr. Monahan: Based on a collateral estoppel preclusion principles, Your Honor.

Which--

Justice Stephen G. Breyer: So it's the same issue as here?

Mr. Monahan: --Well, it's even somewhat worse in my opinion, because not only do they have a different party, but they went from a nationwide class to a statewide class, and that itself is -- you know, that's -- even Bridgestone; that would be all right under.

Justice Antonin Scalia: Of course you -- you would say that the subsequent plaintiff is not bound if he was not given notice and an opportunity to opt out, even if he came back to the same court, right?

It would be a stupid thing to do.

Mr. Monahan: Yes, Your Honor.

Justice Antonin Scalia: And he's probably going to lose.

But you would say he's not bound, right?

Mr. Monahan: Yes, yes, because he's not the same party -- but the legal standard would be the same and it would not be a wise move.

Chief Justice John G. Roberts: Thank you, counsel.

Mr. Beck.

ORAL ARGUMENT OF PHILIP S. BECK ON BEHALF OF RESPONDENT

Mr. Beck: Mr. Chief Justice, and may it please the Court:

The core issue here is whether absent class members can be bound by a denial of class certification where there was adequate representation on that issue, but not notice and opportunity to be heard.

Justice Elena Kagan: When you said on that issue, Mr. Beck, on what issue, because I think that there is an argument in this case that the West Virginia approach to class certification is different from the Eighth Circuit's approach, that Rezulin would not have been the way that the Eighth Circuit would have approached the class certification question.

Mr. Beck: The issue that was decided and preclusive was the issue of predominance, Your Honor, and what happened there is that Judge Davis, the judge who was supervising the multidistrict litigation, he made a determination under West Virginia law as to what's required to make out an economic loss claim, and he concluded that what is required is individual proof of injury as well as individual proof of causation, and then he went on to describe what kind of evidence would be necessary to do that.

So he made a legal determination, and then he went -- and then after looking at what kind of evidence would be required -- excuse me -- made a, I think a mixed law and fact determination that given that, individual issues would predominate over common issues.

His -- his interpretation of West Virginia law was later vindicated by the West Virginia Supreme Court in White, where they held that -- that there is a requirement of individual proof of injury, which had been contested by Petitioners, and it's clear that it's going to require the same exact kind of inquiry.

So what we have is that there's no suggestion in Rezulin or anywhere else that the predominance requirement under the West Virginia version of Rule 23, which is essentially identical to the Federal version, has any other content that's different from the Federal version.

In Rezulin there's a suggestion that when -- that the West Virginia courts would treat differences in -- in damages or reliance as less significant than some Federal courts, but nothing at all that suggests in any way that if the underlying cause of action requires individual proof of injury and causation, that somehow that common questions are going to predominate over individual questions.

There's no suggestion of that--

Justice Ruth Bader Ginsburg: They couldn't know, they -- when they went to the West Virginia Supreme Court, that was before this White v. Wyatt.

They were arguing a question of substantive law: What do we have to show in order to get damages, when we say we weren't hurt by the drug, we're saying -- we're not saying we didn't get any benefit from it.

We're just saying we paid more money for it than we should because it wasn't of the quality that it was represented to be.

When the Federal judge said, having to make a determination of West Virginia law, no, it's not the law; you have to show causation, some harm to you.

But then when they -- when these plaintiffs went to the West Virginia court, that was still an open question of West Virginia law, and the West Virginia courts might have decided it differently than the Federal court, right?

Mr. Beck: --Yes.

Well, yes -- when the Federal district judge made the determination, it was in Mr. McCollins's case, and he's called upon to resolve questions of State law just like courts are every day in diversity actions; and he resolved the question of State law, what's required by the West Virginia Consumer Credit and Protection Act.

Justice Ruth Bader Ginsburg: But sometimes Federal judges, they try their best, they're not the last word on what the State law is.

Mr. Beck: And some -- and Your Honor, if -- if for example, Judge Davis had found as he did in McCollins, and then he had issued the same injunction, and then the White case had come down the other way, that -- that says that there is no requirement of injury, then conceivably the Petitioners could have gone back to Judge Davis and asked for relief from his injunction, and then we would have an interesting question.

Justice Ruth Bader Ginsburg: Not these Petitioners.

They weren't parties to the case before.

Mr. Beck: No, but they were -- they were parties to the injunction proceeding.

They were the defendants in the injunction proceeding.

So they're subject to an injunction, and then -- then the law changes, or the law is declared differently by the West Virginia Supreme Court.

Nothing would have precluded them from coming back in front of Judge Davis and said respectfully, sir, you -- you were wrong in your prediction, and we would like to be relieved from the injunction, and then we would have a very interesting question about whether being correct or incorrect is -- is something that can eliminate the law of preclusion; because normally if -- if a party is precluded, they're not allowed to say I shouldn't be precluded because I think the judge made a mistake on the law.

But we don't have that here because, in fact, Judge Davis was vindicated on -- when it comes to West Virginia law--

Justice Elena Kagan: Mr. Beck, I'm -- I'm not sure that White answers the question that I asked, because White decided a matter of substantive liability, and the question I asked was whether the approach to class certification was different in the Eighth Circuit and in West Virginia.

Mr. Beck: --Yes.

Justice Elena Kagan: If you look at Rezulin, if you compare to it some Eighth Circuit cases, there seems to be a difference in at least tone, shall we say, about the extent to which a finding is required that common issues predominate.

Mr. Beck: I think that, actually, Judge Davis took into account the difference in tone, and he looked very carefully at Rezulin, and he said that what Rezulin was focusing on was individual questions of damages, which defendants often argue is enough so that individual questions predominate, individual questions of reliance, which we also often argue mean that individual questions predominate.

But he said this is different, because this is, in order to prove liability, they've got to establish individual injury, which means, on a person-by-person basis, either that they were harmed by the drug or that the drug didn't work to lower their cholesterol as -- as it was supposed to, and they have to show that whatever the violation of the Consumer Fraud Act was is causally linked there.

And he said that's a different animal from questions of reliance and damages, and -- and I've heard or read no conceivable explanation about how, under any standard of predominance, you could have common questions predominating when every single member of the class is going to have to examine the medical records to see whether their cholesterol came down, whether they suffered any side effects, and -- and if their cholesterol didn't come down and they did suffer side effects, how that could be linked to a violation of the Consumer Fraud Act.

So what Judge -- Judge Davis didn't depart from Rezulin at all.

Judge Davis said this goes to core questions of liability, and as I interpret the West Virginia statute, in order to establish liability, they're going to have to show that on an individual-by-individual basis, and the relevance of White is that he's correct.

Of course, White even goes further and says because of that there's no cause of action under the West Virginia Consumer Credit and Protection Act.

Justice Ruth Bader Ginsburg: How do you answer that they have claims that do not involve the consumer?

Whatever it is that -- they have fraud claims and some other kind of claims.

Mr. Beck: A warranty claim, Your Honor.

There was also a warranty claim in the McCollins case, the original Federal case.

Their warranty claim is no different, and the requirements of a warranty claim are no different.

Fraud obviously requires individual proof of injury and causation.

The fraud is -- I mean, the Consumer Fraud Act is -- is an effort to make it easier for plaintiffs to make out a cause of action.

If you can't make out a cause of action under the Consumer Fraud Act, it certainly can't be made out under fraud.

And in terms of preclusion law, what the Eighth Circuit observed was that when there's the -- the same core set of facts that make out a cause of action, adding another label to it doesn't change the preclusion analysis.

Justice Ruth Bader Ginsburg: Mr. Beck, if you're right about issue preclusion, then if Bayer had gone into the West Virginia court and said, West Virginia court, Judge Davis has decided this case in Minnesota Federal District Court; issue preclusion, that's one thing.

But what was used here was quite a heavy gun, and that is the -- an empty suit injunction, which seems to say: We're not going to trust the West Virginia court to apply issue preclusion.

We're going to stop that court from proceeding altogether.

And the anti-suit injunction is -- it's a very strong weapon, and even though it's the -- the clients who are being precluded, it's really saying to another court: We're not even going to let you get to this question, we're going to stop you.

So maybe you could be right about preclusion but wrong about use of the anti-suit injunction.

Mr. Beck: Well, Your Honor, the -- any time that someone invokes the relitigation exception to the Anti-Injunction Act, by definition, an alternative would be to go into the second court and -- and just simply plead preclusion.

That would always be available.

And if that were sufficient, then there would be no relitigation exception to the Anti-Injunction Act.

Here's a reason why it's very important in a case like this.

Under their theory, they -- they could not only file a class action in one county in West Virginia, and then if we couldn't get an injunction but we pled preclusion, and if -- and if we prevailed, they could file one in another county.

And in West Virginia, county judges don't look to judges from other counties of stare decisis.

And so they could go, under their approach, to another county, and that judge might agree with us.

And then they go to another county, and eventually they're pretty confident that they would find one judge in one county in West Virginia who would reject our preclusion analysis and allow the case to go forward.

And in West Virginia, we have no right to have an appeal heard.

There is no intermediate appellate court, and there's no appeal of right to the West Virginia Supreme Court.

Justice Anthony Kennedy: Well, of course you're arguing the principle.

What would have happened if the class had gone -- those who wanted to be in the class had gone first to the West Virginia court and the West Virginia court had denied class certification?

Would that preclude a later Federal court from granting class certification?

Mr. Beck: If the -- if the West Virginia court had denied class certification on an issue that is present in Rule 23, then it would be preclusive under Rule 23.

It would be under the Full Faith and Credit statute, where Federal courts have to give full faith and credit to State judgments to the same extent that a State would.

If, however, Your Honor, the court said in West Virginia, Well, they meet all of the requirements of our Rule 23, but under West Virginia law we have discretion to deny a class even if they meet all the requirements of Rule 23, then that would be an interesting question, because under Federal procedure, under this Court's opinions, if someone meets all the requirements of Rule 23, then class certification is appropriate.

Justice Elena Kagan: Mr. Beck, the relitigation exception of the Anti-Injunction Act speaks in terms of judgments.

Why is the denial of class certification a judgment?

Mr. Beck: I'm not sure that it would be in -- in the mine-run case, but we don't have it.

We -- one of the reasons that this case is unusual is that we actually have a real-life final judgment that incorporates the denial of class certification.

Justice Elena Kagan: But the judgment, if I understood it correctly, there was just a contemporaneous summary judgment motion, and the court granted summary judgment as well.

But the denial of class certification isn't responsible for the judge's dismissal of the suit.

Mr. Beck: Well, but it is -- it is merged into the judgment.

It's explicitly a part of the judgment.

It's in the judgment itself.

I think it's our Joint Appendix -- 83, is it?

Justice Elena Kagan: So that sounds like a very contingent answer to my question.

If that were not the case, if it -- if there was the denial of a class certification, but then the action proceeds as a non-class litigation, you think that there would be no judgment, and so the Anti-Injunction Act would not apply?

Mr. Beck: No, Your Honor.

I think that would be tougher question.

It's posed in some of the other cases percolating up, the Thorogood case, for example, or some of them out of the Seventh Circuit.

I think that under normal preclusion analysis, decisions that have not reached the point where there's a formal final judgment can still be given preclusive effect if they're sufficiently final, that a court says it's exceedingly unlikely that we could reconsider.

There's another--

Justice Ruth Bader Ginsburg: That's true about -- that's true about preclusion, but -- and so that you might go into the West Virginia court and say this second plaintiff should be precluded, but as Justice Kagan pointed out, you're dealing with the anti-injunction statute that talks about judgment.

Mr. Beck: --And I was about to say, Your Honor, that -- that under the Anti-Injunction Act it might actually be a different analysis, and because the issue isn't present here, we haven't briefed it, but I could see under the -- looking at the statutory language of the re-litigation exception that talks about judgments and also looking to the Federalism concerns that -- that inform the -- the Anti-Injunction Act, one could argue, in an appropriate case, that whatever the law is as to preclusion generally, when it comes to the Anti-Injunction Act, we're going to require more in the form of a -- of a formal judgment that -- that incorporates the particular ruling.

As I said, that's not our case, but--

Justice Elena Kagan: Oh, but why isn't it really, because here what happened was that there was a denial of class certification and there was a granting of a summary judgment motion at one and the same time?

But the thing that was responsible for getting the case out of court was the granting of the summary judgment motion, not the denial of class certification.

That was extraneous to the judgment that the case was dismissed.

Mr. Beck: --I think it's actually -- while -- while it was collateral to the summary judgment motion on Mr. McCollins' individual claim, it's actually essential to the judgment in -- in terms including it, in terms of who's bound by -- by -- by the judgment.

If class certification had been -- we -- we need to know once the judge has ruled on class certification, whether he's granted it or denied it in order to know who's affected by the judgment on the merits and otherwise.

And if he had granted the motion to certify the class, then there would be one set of effects coming out of a final judgment.

If he denies the motion to certify the class, there's a different set of effects that come out of the judgment.

So, it is essential to the judgment, in our mind, and incidentally the -- essential to the judgment point under preclusion law is not one that -- that the Petitioners have ever raised below.

It's not one that is in their questions presented or their cert petition or their brief.

So this isn't an issue that -- that they've preserved or argued, but we do believe, quite clearly, that the class certification denial was an integral part of the final judgment, and -- and obviously it's in there on its terms.

Justice Sonia Sotomayor: Counsel, under the Anti-Injunction Act, would it permit a blanket injunction that says, against all future State court class proceedings across the United States?

Could a court just order a re-litigation bar?

Mr. Beck: I don't believe so, Your Honor.

I think that -- I think that in this Court's Chick Kam Choo decision, there was an emphasis that under the Anti-Injunction Act you have to have, you know, the same issue litigated, and there was a concern about whether there was a significant difference in standards.

Justice Sonia Sotomayor: That's my question to you.

Mr. Beck: Yes.

Justice Sonia Sotomayor: So articulate what we're comparing when we're saying that the relitigation bar can apply to a procedural ruling.

Mr. Beck: Yes.

Justice Sonia Sotomayor: We started a little bit on the question.

Is there any requirement that that issue have been fully and fairly adjudicated in the prior proceedings?

Mr. Beck: Oh, I think -- I think that for the -- for -- for preclusion to apply, even before one gets to the Anti-Injunction Act, there's a requirement that the issue be fully and fairly litigated.

I think that -- I think the focus would be, as Judge Davis's was, is there a difference in -- in the class certification procedures that would -- that would result in a -- in a different outcome, given the particular issue that's been decided.

So that -- so that there -- you know, I could conceive of issues that would be dispositive in a Federal court on class certification that would have nothing to do with -- with certification in State court.

Justice Sonia Sotomayor: Let's say -- you talked about different standards.

Your adversary said that in this State reliance doesn't need to be proven.

Let's assume that fact.

And the district court's ruling here was based on a reliance requirement and said no predominance because each individual plaintiff will have to prove reliance.

Does that become the same -- a different standard or no?

Mr. Beck: Judge Davis's opinion was not based in any way on reliance.

Justice Sonia Sotomayor: I -- I -- I'm posing it as a hypothetical.

Mr. Beck: Oh, I'm sorry.

I'm sorry.

Justice Sonia Sotomayor: As a hypothetical.

Mr. Beck: If a State court had said that this thing, that -- that reliance or whatever, that is talked about so much in Federal courts, we don't care about that, that's not part of our standard, then -- then that would be -- and that was the basis of the Federal court's decision, then I think you would be applying different standards, and under Chick Kam Choo, there wouldn't be preclusion.

Justice Sonia Sotomayor: You see, the problem is that I don't know how you get and when you get to the question of whether reliance needs to be proven or not, if you're going to bar the State court from reaching that -- that substantive question, not that substantive issue, but that substantive question, which is not very different from here, which is what does economic loss require in terms of proof?

Mr. Beck: Well, we're -- we're moving now from what is in Rule 23 in Federal and State jurisprudence to what is the underlying cause of action when we -- when -- you know, whether reliance is a part of the plan.

We keep saying "reliance" and--

Justice Sonia Sotomayor: Well, I'm shifting them only to try to get--

Mr. Beck: --Okay.

Justice Sonia Sotomayor: --a sense of what different standards mean--

Mr. Beck: Okay.

And -- and--

Justice Sonia Sotomayor: --to you, and how we articulate that rule in a way that doesn't preclude -- doesn't permit the barring--

Mr. Beck: --I think--

Justice Sonia Sotomayor: --of claims when there is a different standard.

Mr. Beck: --I think -- I think, Justice Sotomayor, that you have to distinguish between Rule 23 and the underlying State law that's the subject of the lawsuit.

And anytime a -- a Federal court is looking at whether a class action can be certified for a violation of State law, it has to make a determination of whether -- of what State law is in terms of how you prove a violation, what the elements are.

And that's what -- that's just -- you have to do that every single day.

And you make that kind of determination, and then you move to the next step of whether that should be preclusive, which is when Rule 23 comes into play.

And I think that's the point where you say, are the State standards under Rule 23 different from the Federal standards.

Justice Antonin Scalia: I'm -- I'm the -- I'm the party trying to bring the later class action, and you tell me I can't do it because somebody else sought a class action and -- and it -- and it was denied.

And I say, well, I don't care, I -- you know, that's somebody else.

That was not me.

I was not -- and not only was I not a party to that case, I think that person had a lousy lawyer, and had I chosen the lawyer, we wouldn't have lost that point.

What's your response to that?

You cannot even say, as you can where the class has been certified, well, at least there was a determination by some judge that the absent parties were adequately represented.

There hasn't been even that determination.

Mr. Beck: Well, Your Honor, there was that determination in this case at the injunction stage.

They did claim -- they -- they said, well, was this -- was this lawyer from West Virginia who made exactly the same arguments that they made, was he -- did he adequately represent our interests.

Justice Antonin Scalia: You do that ex post, you litigate this later?

Mr. Beck: Well, adequacy of course is part of rule 23 analysis, but it's also independently a part of preclusion law analysis where in order to be precluded, for a nonparty to be precluded, then you have to do the analysis that's called for in Taylor v. Sturgell, where you have to say in order to preclude a nonparty, does it meet the two-part test of Taylor v. Sturgell.

The first part: were their interests aligned?

Here their interests were perfectly aligned.

And then the second part is an either/or: did the party in the first action understand herself -- in this case himself -- to be acting in a representative capacity or did the court take care to protect the interests of the nonparty?

Chief Justice John G. Roberts: But that's a very subjective decision whether the lawyer is -- right here.

Mr. Beck: I'm sorry.

Chief Justice John G. Roberts: --whether the -- the lawyer is adequate or not.

People have different kind of views about what kind of lawyer they want, and I can see someone who doesn't even know that this action is going on saying, I don't care if you think the lawyer is adequate, I don't think he is; besides I wanted -- you know, my brother-in-law to be the lawyer.

Mr. Beck: Well -- and in every preclusion case there's a -- there's a question about adequacy, and it focuses not on whether someone likes the lawyer or they've got a brother-in-law who is a lawyer.

It focuses on whether the parties' interests are aligned, and McCollins' interests were identical to Mr. Smith's and Ms. Sperlazza's; and it -- and it points to whether Mr. McCollins understood that he was acting in a representative capacity and to whether Judge Davis took care to protect the interests of nonparties.

So it doesn't say that everybody gets to pick their own lawyer.

If that were the rule, there would be no law of preclusion because nobody would ever pick the same lawyers.

My -- one other point I want to make--

Justice Antonin Scalia: But if it -- I'm sorry.

Chief Justice John G. Roberts: You know, to say -- it's odd to say you're precluded.

The whole point is the basic principle that you're entitled to your day in court, and you're saying well, you're not entitled to your day in court if somebody else had a day in court and they had a good lawyer.

Mr. Beck: --And -- and that is exactly the question that is posed by nonparty preclusion; and -- and as this Court's opinion in Taylor v. Sturgell said, there are circumstances where a nonparty can be precluded based on litigation from someone else, and I -- I referenced the test, and the first point I wanted to make--

Justice Antonin Scalia: How can you -- how can you possibly find that in the first action the lawyer understood that he was acting in a representative capacity?

Mr. Beck: --Well if--

Justice Antonin Scalia: He tried to act in a rep -- but -- but his representation was denied.

Mr. Beck: --It's the party rather than the lawyer, and -- and it's when -- when he commenced that litigation and when he litigated the issue that we're talking about of class certification, there's no doubt in the world that he is -- that he understood himself to be acting on behalf of a class.

That -- that's why he was litigating class certification, and -- and, Your Honor, what we -- we have here also, because we're -- we're kind of verging into the due process analysis, you have to start with the question of what is the interest that's at stake here.

The injunction doesn't forbid any -- any plaintiff from pursuing their individual claim or arguing anything they want about underlying West Virginia law.

It only precludes them from going forward in a class action, and that is--

Justice Ruth Bader Ginsburg: But that's -- that's often theoretical because on these small claims, it's class action or nothing.

Nobody's going to pay a lawyer to go to court with a $100 case.

Mr. Beck: --These I don't think fall in that category, Your Honor.

There's -- it's $200 statutory penalty per violation, which means per prescription refill.

There's -- there's attorney's fees on top of that; there's punitive damages on top of that.

The McCollins case in Federal court was that kind of case, and he pled that he satisfied the jurisdictional amount of $75,000.

But even if it's a small claim, the -- that doesn't mean that the opportunity to litigate it in a class action and join other parties is a property interest that implicates due process protections.

That is--

Chief Justice John G. Roberts: Thank you, counsel.

Thank you.

Mr. Monahan, you have 4 minutes remaining.

REBUTTAL ARGUMENT OF RICHARD A. MONAHAN ON BEHALF OF PETITIONERS

Mr. Monahan: In this case, the MDL court did not seek to bind any parties.

The decision was deny class certification; the decision was not to bind any absent class members.

Moreover, in cases talking about adequate representation, such as Hansberry v. Lee and the Richards case, one of the things this Court noted was that normally you have a judgment that indicates who it purports to bind.

There's nothing in the district court's initial judgment indicating that the absent class members are bound by the denial of class certification, nothing whatsoever.

In Devlin v. Scardelletti which they say supports their position, clearly it supports our position, because that was a case dealing with a certified class settlement, where there were objections.

And because the objections were made and overruled, this Court noted that those people could appeal directly without having to intervene in that case.

Justice Ruth Bader Ginsburg: Well, you have to -- I think you would concede that the Seventh Circuit, now two decisions, one in Bridgestone and then the other in Thorogood, the Seventh Circuit thinks it can do this.

Mr. Monahan: Yes, Your Honor, and the Seventh Circuit for instance in Bridgestone, which -- which the Eighth Circuit relied on in this case, indicated that adequate representation was one of the factors, our right to appeal was one of the factors, and then our individual claims still existing, consisted sufficient due process.

But one, we have no notice, so how can we appeal anything if we don't know it exists?

And this Court has noted that in many cases, in Mullane and Richards and throughout, that if you have no notice of a matter, how can you ever have an opportunity to be heard because you don't know about it?

Now, as to adequate representation, that was something I wanted to turn to.

Justice Anthony Kennedy: But just on notice, does the record show when the client first came to the attorney?

Mr. Monahan: Your Honor, our case was filed in September 2001.

The McCollins case was filed in August 2001, and nobody knew about the other one at all.

I mean, these cases were filed almost the same time, less -- less than a month apart in different counties, different attorneys, different named plaintiffs.

I did want to note in Devlin v. Scardelletti, Justice Scalia noted his dissent that not even Petitioners were advancing the novel and surely erroneous argument that absent class members were considered parties before class certification.

Justice Stephen G. Breyer: Do we know that in the record, that the attorneys didn't even know about each other's cases?

Is that borne out?

I mean, is that an issue?

Mr. Monahan: Your Honor, we've argued that throughout.

We knew nothing about it.

And see, the MDL proceeding, we had like one or two cases that were filed, individual actions where the plaintiffs did not want to seek class action status, and those got removed to Federal court and transferred.

The MDL court provides notice of the orders affecting all cases in general and then provides you with orders in your own case.

You do not get orders about other individual cases.

So we never knew about McCollins and then proceeded to class certification.

I would note that the White case here in no -- no way vindicates the district court.

The White case did say that reliance did not have to be proven if you have fraudulent concealment or suppression.

Rather, the standard is all you have to do is you have to show would an objectively reasonable person have bought the product had they known all the information that was concealed and suppressed; and clearly that can be dealt with on a common basis.

But a confusing aspect here, it seems like many people try to argue that for class actions that you have to have all common issues or else you can't have one; and that's unfortunate because I'm not aware of any class action where you don't have--

Justice Ruth Bader Ginsburg: Can I just go back to what you said before?

I thought the West Virginia Supreme Court said you can't have actions for drugs under the consumer whatever.

Mr. Monahan: --Yes, they added -- they added a syllabus point 6, the last paragraph of the opinion, a paragraph that says that from now on that -- that prescription drug purchasers cannot have such a claim; and that was unknown to anybody, it was not raised in part of the certified question and had not been litigated or argued.

So that's part of the petition for rehearing is my understanding.

Chief Justice John G. Roberts: Thank you, counsel, counsel.

The case is submitted.

Print this transcript Transcript: 

Justice Elena Kagan: This is a very complicated procedural case.

So if you understand anything that I say right now, you have a law degree and you've had your cups of coffee this morning.

In this case, a federal court ordered a West Virginia State Court not to rule on a motion to certify a class action.

The federal judge thought that he could issue that order because he had refused to certify a class action in a similar case that was brought against the same defendant but by a different plaintiff.

We took this case to decide whether the federal judge's order was permissible under the Anti-Injunction Act, a federal statute that generally prohibits federal courts from interfering with state court proceedings.

We hold that it was not permissible.

As the Anti-Injunction Act's name suggests, its purpose is to prevent federal court injunctions against state court proceedings otherwise it might be called the Pro-Injunction Act.

But the Act stand on these injunctions is not absolute.

The Act contains three narrow exceptions.

And the one at issue here is called the relitigation exception.

What it does is to say that a federal court may grant an injunction to stay proceedings in a state court when necessary to protect or effectuate the federal court's judgment.

This exception we've held is grounded in the law of preclusion which generally determines whether one court's judgment forecloses another court from considering issues or claims already adjudicated in the first suit.

An injunction under the relitigation exception is justified only when the initial federal judgment clearly precludes relitigation of a given issue or claim in state courts under standard principles of preclusion law.

The two fundamental principles of preclusion law are at stake in this case.

First is the rule that a judgment cannot preclude relitigation of an issue in a second suit unless the two courts here, the federal court and the state court are addressing the very same issue.

Under the law of issue preclusion, two courts do not address the same issue unless they are using the same legal standard.

And here that requirement was not met because in determining whether to certify these class actions, the federal court and the state court were governed by different legal standards.

In federal court, the question was controlled by a Federal Rule of Civil Procedure 23.

While on state court, the question is governed by West Virginia Rule of Civil Procedure 23.

And although the texts of these two rules are mostly the same, the governing judicial interpretations are not.

The West Virginia Supreme Court has made clear that it does not necessarily follow federal class certification precedents and in its leading case, it adopted an approach markedly different from the approach applied by the federal court.

Because the governing legal standards were different, the issues before the two courts were also different.

And that means the federal court had no right to order the state court to accept its judgment that a class action should not be certified.

The District Court's injunction also violated a separate rule of preclusion law what we called "the rule against nonparty preclusion".

This means that a person who was not a party to a case cannot be bound by a judgment in that case except in very limited and precisely defined circumstances.

And here the plaintiff in the state suit was not a party and the federal suit he in fact had no connection to that suit.

And none of the exceptions to the rule against nonparty preclusion apply.

The only exception we were asked to consider is one from members of a properly conducted class action.

But that exception does not apply for the simple reason that the federal court in this case never certified a class.

To the contrary, it found that the case was not appropriate for class treatment.

And the properly conducted class action exception cannot be invoked when there was no certified class action.

So for this reason too, the District Court was wrong to enjoin the state court proceedings.

Because the Court of Appeals affirmed the District Court's conjunction, we must reverse the judgment of the Court of Appeals.

The opinion of the Court is unanimous.

Justice Thomas joins only Parts I and II–A of the opinion.