Plaintiffs sued Defendants for exposure to asbestos. Plaintiffs moved to certify a class action, encompassing millions of potential plaintiffs.
In addition to meeting all the requirements of Rule 23, the court should consider whether the class is being formed only for settlement when certifying a class action.
A group of individuals (Plaintiffs) sought to form a class action against twenty companies (Defendants) for their exposure to asbestos through products manufactured by the Defendants. The class action would include potentially millions of individuals potentially exposed to asbestos by the Defendants. Objectors to the class action argued that it did not meet the adequacy of representation requirement under Rule 23.
May a court consider settlements when determining the propriety of class action certification?
Yes, settlement is relevant to certification of a class action. However, the class action in this case did not meet the other requirements of Rule 23. The decision of the Court of Appeals is affirmed.
Justice Breyer agreed with the Court on the importance of settlement, particularly given how large and complicated the asbestos lawsuits were. But he disagreed with the Court’s discussion of class certification under Rule 23. Justice Breyer argued that certification was a fact-based determination that should be left to the district courts’ discretion.
The Court first concluded that whether a class action is formed specifically for settlement purposes is a relevant consideration to class certification. But the Court clarified that certification is not automatically proper just because a settlement is fair, the class action must also meet all of the requirements of Rule 23. Here, the Third Circuit was correct in determining those requirements were not fulfilled because the class action was not common or adequate. The many plaintiffs had suffered very different injuries or not yet suffered an injury from the asbestos exposure, and their varied interests in compensation could not be adequately represented by the named parties.