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.
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.
Confronted with a request for settlement-only class certification, a district court need not inquire whether the case, if tried, would present intractable management problems, for the proposal is that there be no trial.View Full Point of Law
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.