## Facts

- A conservator for an elderly annuity purchaser brought a putative class action against an insurer challenging the sale of fixed deferred annuities as unsuitable for seniors due to long maturity dates and surrender-charge restrictions.
- The complaint asserted federal RICO claims, fiduciary-duty theories, unjust enrichment, and California statutory claims.
- The district court certified (1) a nationwide class for the RICO claims covering purchasers age 65 or older within limitations periods and (2) a California-only class for California statutory claims.
- Other overlapping class and governmental proceedings concerning similar annuity products were pending in state and federal courts, including actions in Minnesota and California.
- Concerned that settlement activity in other fora could produce a “reverse auction” settlement affecting the certified class, the district court entered an order that:
  - required the insurer to obtain permission from class counsel before engaging in settlement negotiations of similar class claims in any other court, and
  - barred the insurer from finalizing any settlement elsewhere resolving claims overlapping the action without approval from the district court.
- The insurer appealed, and the court of appeals treated the order as an appealable injunction.

## Issues

1. Whether the district court had authority under the All Writs Act to restrict a party’s settlement negotiations and settlements in overlapping class actions pending in other federal and state courts.
2. Whether the order violated the Anti–Injunction Act because it effectively interfered with state-court proceedings without fitting within any statutory exception.

## Decision

- The court of appeals reversed the order.
- The All Writs Act did not supply authority for a broad, preemptive restraint on settlement negotiations in other courts absent a concrete threat to the district court’s jurisdiction.
- The Anti–Injunction Act barred the restraint because no exception applied: there was no express congressional authorization, no showing the restraint was necessary in aid of jurisdiction, and no judgment to protect or effectuate.
- Speculative concerns about a possible reverse-auction settlement, without evidence of collusion or an imminent settlement requiring protection, were insufficient to justify the injunction-like restrictions.

## Legal Principles

- The All Writs Act authorizes orders “in aid of” jurisdiction, but it is not a free-standing source of power to control parallel litigation or settlement activity in other courts.
- The Anti–Injunction Act prohibits federal court orders that enjoin or effectively interfere with state-court proceedings unless one of three exceptions applies: express congressional authorization, necessity in aid of jurisdiction, or necessity to protect or effectuate judgments.
- Parallel or overlapping class actions, standing alone, do not justify extraordinary relief limiting litigation or settlement conduct in other courts; concerns about settlement adequacy are ordinarily addressed through the approving court’s fairness procedures.

## Conclusion

The Ninth Circuit held that a federal district court may not use the All Writs Act to impose sweeping controls on settlement negotiations and settlements in overlapping actions in other courts based on speculative fears of an unfavorable settlement, and that the Anti–Injunction Act barred the restraint where no statutory exception applied.


Negrete v. Allianz Life Ins. Co. of N. Am., 523 F.3d 1091 (9th Cir. 2008)