372
Opinion of the Court
idly requested exclusion therefrom), . . . in connection with or that arise now or hereafter out of the Merger Agreement, the Tender Offer, the Distribution Agreement, the Capital Contribution Agreement, the employee compensation arrangements, the Tender Agreements, the Initial Proposed Settlement, this Settlement . . . and including without limitation the claims asserted in the California Federal Actions . . . are hereby compromised, settled, released and discharged with prejudice by virtue of the proceedings herein and this Order and Final Judgment." In re MCA, Inc. Shareholders Litigation, C. A. No. 11740 (Feb. 22, 1993), reprinted in App. to Pet. for Cert. 74a-75a (emphasis added).
The judgment also stated that the notice met all the requirements of due process. The Delaware Supreme Court affirmed. In re MCA, Inc., Shareholders Litigation, 633 A. 2d 370 (1993) ( judgt. order).
Respondents were members of both the state and federal
plaintiff classes. Following issuance of the notice of proposed settlement of the Delaware litigation, respondents neither opted out of the settlement class nor appeared at the hearing to contest the settlement or the representation of the class. On appeal in the Ninth Circuit, petitioner Matsushita invoked the Delaware judgment as a bar to further prosecution of that action under the Full Faith and Credit Act, 28 U. S. C. § 1738.
The Ninth Circuit rejected petitioner's argument, ruling that § 1738 did not apply. Epstein v. MCA, Inc., 50 F. 3d 644, 661-666 (1995). Instead, the Court of Appeals fashioned a test under which the preclusive force of a state-court settlement judgment is limited to those claims that "could . . . have been extinguished by the issue preclusive effect of an adjudication of the state claims." Id., at 665. The lower courts have taken varying approaches to determining the preclusive effect of a state-court judgment, entered in a class
Page: Index Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 NextLast modified: October 4, 2007