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AmChem Products, Inc. v. Windsor

    Brief Fact Summary. The District Court certified a class of those who were or might be affected by asbestos manufactured by Defendants. The certification was for settlement purposes only. Objectors to the settlement appealed, arguing that absent class members were not adequately notified of the settlement nor were their interests adequately represented.

    Synopsis of Rule of Law. The District Court must determine whether all class members’ interests are adequately represented when determining the fairness of a class action settlement. Common questions of law and fact must still predominate in the context of a settlement, especially if the settlement disposes of claims prior to the realization of an injury.

    Facts. The District Court certified a class of people for settlement purposes only who were, or who might be affected by asbestos manufactured by AmChem and others, Defendants. The certification enjoined the class members from pursuing any separate litigation pending the final order. The Court of Appeals reversed, saying the certification did not comply with Rule 23 of the Federal Rules of Civil Procedure. The Panel of Multidistrict Litigation transferred all the asbestos cases then filed but not yet on trial to one district for pretrial proceedings. A settlement as the result of negotiation was reached between Defendants and Plaintiffs who had already filed suit. This suit was instituted to determine the interests of potential plaintiffs who had not yet filed lawsuits. Plaintiffs moved to certify a class of people who had been exposed to asbestos but had not yet sued. All named Plaintiffs claimed to have been exposed to asbestos. A settlement was proposed.
    Fairness proceedings were conducted and many class members raised objections to the settlement. Their objections were that the settlement was for too low an amount, did not provide adequate compensation for those with conditions that have not yet manifested, and that representation was not adequate. The judge determined that the settlement had been arrived at fairly, and without collusion. The objectors wanted a separate class to be represented by other counsel for those without injuries. The District Court rejected this proposal, holding that separate classes would cause confusion, and that the objectors could opt out of the settlement. The objectors appealed.
    The Court of Appeals found that there was no common question that predominated, because some class members had injuries while others did not. In addition, there were potentially adverse interests that made representation inadequate. This potential conflict made the named class members not a “typical” class. Finally, the class action was not “superior.” The potential that exposure-only members would be bound by judgments was unfair since they do not know what will happen if they stay in or opt out. The Court of Appeals found consolidation under Rule 42(a) of the Federal Rules of Civil Procedure or certification of subclasses would be preferable to the current class action.

    Issue. Have the qualifications of predominance and superiority been met under Rule 23(b)(3) of the Federal Rules of Civil Procedure such that the class of those injured and exposed to asbestos should be certified for settlement purposes?

    Held. No. Judgment affirmed.
    The qualifications for class actions pursuant to Rule 23(b)(3) of the Federal Rules of Civil Procedure are “predominance of common questions of law and fact” and whether the class action is the superior method for adjudication.

    Although Rule 23(b)(3) of the Federal Rules of Civil Procedure does not exclude class actions where individual claims for damages are high, the point of a class action is to help class members that are without strength individually to bring a claim against their opponents as a group. The class action is therefore an aggregation of the small claims of others in order to strengthen the actions.

    Notice must be sent to members to protect their rights.

    In the context of a class action, one does not have to look to the qualifications that determine the efficiency of the class in the context of a trial. One has to look to the class-qualifying criteria that protects absent class members.

    The court must determine more than just whether or not the settlement is fair in order to certify the class.

    Although all the class members have asbestos exposure in common, the questions peculiar to the several categories of class members and the dispute over the health consequences of such exposure cannot satisfy the predominance requirement.

    The Advisory Committee of the Federal Rules of Civil Procedure states that a mass tort case should not satisfy the predominance requirement if “individual stakes are high and disparities among class members are great.”

    There is not adequate representation of absent class members. The named plaintiffs seek present (not future) payments, which conflicts with those class members that are not entitled to payment yet.

    In addition, Plaintiffs and Defendants have tailored limited Defendants’ liability under the settlement agreement regarding absent class members. This would limit the claims of non-represented class members without their participation in the suit.

    Dissent. Justices Breyer and Stevens, concurring in part and dissenting in part:
    Class certification is to be considered by the District Court and should only be reviewed for an abuse of discretion.

    It is very important that this case be settled. There are 21 million class members, extremely complicated studies showing the effects of asbestos and high transaction costs for plaintiffs. The attorneys spent a long time determining how to efficiently administer the settlement.

    The Court must look to the settlement to determine whether there is a predominant question. Differences in state law or uncommon questions should not make a difference when there is a settlement involved.

    If subclasses or de-certification are warranted, then the case should be remanded back to the Court of Appeals. The Supreme Court is too distant from the litigation to determine the fact specific questions of Rule 23 of the Federal Rules of Civil Procedure.

    Although there is a conflict with the terms of the settlement and the exposure-only plaintiffs’ interests, this is common. The cases are consolidated in order for one court to be charged with ensuring that the interests of all the parties are protected.


    Discussion. A class action settlement must be evaluated in the context of not just present claims but future claims. The Court’s opinion demonstrates that when there is a potential conflict among class members within the class, class certification for a settlement that disposes of absent class members’ claims is not appropriate.


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