Ordinarily, a federal trial court cannot order that some other lawsuit in state court be stopped.
When federal courts preliminarily approve class action settlements, however, they often enjoin prosecution of competing cases that could interfere with the settlement. Federal courts issue those injunctions under the “in aid of jurisdiction” exception to the Anti-Injunction Act. See 28 U.S.C. Sec. 2283.
Last week, the Ninth Circuit issued an opinion analyzing this obscure, but critically important, aspect of federal procedure. The Ninth Circuit held that where a classwide settlement was not imminent, a trial court did not have authority to effectively enjoin other courts from overseeing settlement talks.
A description of Negrete v. Allianz Life Insurance Co. of North America, 2008 WL 1868993, along with the key money quotes, appears here at the Mass Tort Litigation Blog.