Mass Tort Settlement Class Actions:

Five Case Studies

Jay Tidmarsh

Notre Dame Law School

Federal Judicial Center 

This Federal Judicial Center publication was undertaken in furtherance of the Center’s statutory mission to conduct and stimulate research and development for the

improvement of judicial administration. The views expressed are those of the

authors and not necessarily those of the Federal Judicial Center.
iii

Contents

Foreword v

Acknowledgments vii

Executive Summary 

Maturity 

Class Membership 

Class Certification Issues 

Class Notice 

Fairness Hearing 

Approval of Settlement 

Negotiated Changes from Tort System 

Attorneys’ Fees 

Policy Issues 

Summary 

Introduction 

The Nature and History of Mass Tort Settlement Class Actions 

Distinguishing Between Litigation and Settlement Class Actions 

A Short History of Mass Tort Settlement Class Actions 

Amchem Products, Inc. v. Windsor 

Heart Valves: Bowling v. Pfizer, Inc. 

Introduction 

History of the Lawsuit 

Settlement Terms 

Handling of Future Claimants 

Notice Procedure 

Approval and Review Process 

Modifications in Traditional Adversarial Roles 

Assessment 

Asbestos Exposure: Amchem Products, Inc. v. Windsor [Georgine] 

Introduction 

History of the Lawsuit 

Settlement Terms 
iv Mass Tort Settlement Class Actions

Handling of Future Claimants 

Notice Procedure 

Approval and Review Process 

Modifications in Traditional Adversarial Roles 

Assessment 

Asbestos Exposure Redux: Ahearn v. Fibreboard Corp. 

Introduction 

History of the Lawsuit 

Settlement Terms 

Handling of Future Claimants 

Notice Procedure 6

Approval and Review Process 

Modifications in Traditional Adversarial Roles 

Assessment 

Breast Implants: Lindsey v. Dow Corning Corp. 

Introduction 

History of the Lawsuit 

Settlement Terms 

Handling of Future Claimants 

Notice Procedure 

Approval and Review Process 

Modifications in Traditional Adversarial Roles 

Assessment 

Infected Blood: Walker v. Bayer Corp. 

Introduction 

History of the Lawsuit 

Settlement Terms 

Handling of Future Claimants 

Notice Procedure 

Approval and Review Process 

Modifications in Traditional Adversarial Roles 

Assessment 
v

Foreword

The future of aggregation is uncertain. Recent cases have established limits

on class actions as devices for national resolution of mass tort claims. In the

evolving world of mass tort litigation, one thing is certain: lawyers and

judges have to ensure that the resolution of these cases is fair to individual

litigants on both sides. For that reason, Professor Jay Tidmarsh’s exploration of five recent settlement class actions will continue to be relevant to

mass tort litigation—and to other class-action litigation—no matter what

twists and turns the ongoing debate may take.

Professor Tidmarsh uses the raw material of our own experiences as

judges to uncover and highlight common questions that these five extraordinarily challenging cases presented to the judiciary. We learn by example

how five practiced and innovative district judges approached the amorphous

call to review settlement class actions and to direct notice to class members.

Should discovery be allowed into arguably secret settlement negotiations

when the negotiators represent tens of thousands or even millions of individuals? Should judges conduct proceedings in the nature of trials to review

the merits of the proposed settlement? Who should get what kind of notice

at whose expense? How should judges assess the adequacy of class representatives and of counsel?

Professor Tidmarsh describes and analyzes five cases that represent a

range of judicial experience on these issues and he does not flinch from assessing whether particular decisions were fair or adhered to evolving legal

standards. He has framed important issues for judges faced with reviewing

all class-action settlements, whether litigation or settlement classes, mass

torts or otherwise. The Center presents his assessments, not to endorse

them, but to help judges determine how they wish to proceed.

A learning organization is one that consciously looks back at its experiences in order to improve its performance. Faced with dramatic changes in

the world of litigation, the judicial branch must behave collectively as a

learning organization. These case studies use the benefits of hindsight to

enhance our foresight. We are grateful to the judges who faced the challenges of these novel cases and shared with us their individual and collective
vi Mass Tort Settlement Class Actions

wisdom, and we are grateful to Professor Tidmarsh for distilling that wisdom and restating it for us.

Rya W. Zobel

Director, Federal Judicial Center
vii

Acknowledgments

The present monograph arises out of a more detailed study that I conducted

regarding the use of settlement class actions in five mass tort cases. I am

grateful to a number of people whose efforts laid the foundation both for

this monograph and for the underlying study: Linda Mullenix, who developed the concept for the study and accumulated much of the information

for it; Tom Willging, who refined the concept, supplied helpful information and direction, and commented on earlier drafts of both the monograph

and the underlying study; and the Honorable Jack B. Weinstein, John Aldock, Arthur Bryant, Joe Cecil, Ed Cooper, Elizabeth Runyan Geise, Brian

Wolfman, and several additional unnamed reviewers familiar with the litigation, all of whom generously commented on earlier drafts of the study.

I am also grateful to the Office of the Clerk for the Northern District of

Illinois and to the Office of the Clerk for the Court of Appeals for the Seventh Circuit for allowing me access, on short notice, to some of the information used in the study.

I am particularly indebted to a group of attorneys whose information

and insights on the cases in which they were involved was invaluable: Gary

Green, Peter Hoffman, Peter Lockwood, Alan Morrison, Joseph Rice, Brian

Wolfman, and two attorneys in the Ahearn litigation and the Factor VIII or

IX litigation that preferred to remain anonymous. The conclusions that I

have reached in this monograph are my own; I am sure that most of these

attorneys will disagree with some, and some will disagree with all, of the

conclusions that I have reached.

I also thank the Federal Judicial Center for the contract that funded the

monograph and underlying study. Once again, the views expressed in the

monograph and study are my own, not those of the Federal Judicial Center.

Readers should know that I served as lead counsel for the United States

in Wilhoite v. United States, a case related to Hagood v. Olin Corporation,

which is discussed briefly in this study. Between  and  I also served

as lead counsel for the United States in the Agent Orange litigation, which

is also mentioned in the study. The United States did not participate in the

settlements in either case, and as counsel for the United States I did not
viii Mass Tort Settlement Class Actions

take any position with regard to the settlements or the propriety of class

certification in either litigation. I did, however, oppose the certification of a

litigation class action in Sharkey v. United States, a related Agent Orange

case brought in the Court of Claims. In  I was asked by one of the defendants in the Factor VIII or IX litigation, which is one of the case studies

in this report, to serve as a legal consultant. After a brief initial conference, I

declined. Subsequently, in , I testified before a House Subcommittee

regarding certain legal concerns that I had with the Ricky Ray Hemophilia

Relief Bill, H.R.  (th Cong.), a bill supported by numerous members of the Factor VIII or IX settlement class. In  I declined a similar

request to testify before a Senate subcommittee on a comparable bill.


Executive Summary

This monograph examines five cases in which Rule  of the Federal Rules

of Civil Procedure has been used to achieve a settlement of a mass tort controversy. After a short introduction, the report sketches the nature and history of mass tort settlement class actions, and briefly analyzes Amchem

Products, Inc. v. Windsor,

1

 in which the Supreme Court entered the debate.

The report then undertakes case studies of the five mass torts that employed

the settlement class action device in federal court between  and the

Court’s decision in Amchem : Bowling v. Pfizer, Inc., Georgine v. Amchem

Products, Inc.,

2 Ahearn v. Fibreboard Corp., In re Silicone Gel Breast Implant

Products Liability Litigation,3

 and In re Factor VIII or IX Concentrate Blood

Products Litigation.

One conclusion leaps out from the case studies: No two cases were alike.

Although some cases had certain features in common, they all differed in

one or more important aspects, such as number of parties, maturity of litigation, compensation mechanism, compensation trigger, mandatory or optout nature of the suit, timing of opt-out rights, presence of future claims,

handling of future claims, amount of notice, procedures for fairness hearings, the likelihood of collusion, the factors used to approve the settlement

as fair, and the factors used to certify the class. The following discussion and

table highlight some of the essential features of the settlements.

. Amchem Prods., Inc. v. Windsor,  U.S. — ,  S. Ct.  ().

. In the trial court, Amchem was first known as Carlough v. Amchem Products. After

plaintiff Carlough resigned as class representative, plaintiff Georgine was substituted, and the

case took on its more familiar name, Georgine v. Amchem Products. It has also been referred

to as Windsor, named after the objector that was one of the respondents in the Supreme

Court. In this report, “Georgine” refers to the proceedings in the district court and court of

appeals, and “Amchem” refers to the Supreme Court’s decision.

. There were two major settlements in the Silicone Gel litigation: the original settlement

in , and a revised settlement in . This monograph analyzes both settlements.
 Mass Tort Settlement Class Actions

Maturity

Of the five cases that settled, only two could be regarded as mature—Georgine and Ahearn. The others were in various stages of growth,

with Bowling being the least mature in terms of verdicts, and Bowling (with

regard to emotional distress claims) and Silicone Gel being the least mature

in terms of settlements.

Class Membership

Size and Scope of Class. The classes ranged in size from ,–, in Factor VIII or IX to ,–, in Bowling to hundreds of thousands in

Georgine, Ahearn, and Silicone Gel. All of the classes were nationwide in

scope; two of them (Bowling and Silicone Gel ) were also worldwide.

Present and Future Claimants. One of the classes (Bowling ) involved

only future claimants. Four (Georgine, Ahearn, Silicone Gel, and Factor VIII

or IX ) mixed together both present and future claimants, although Factor

VIII or IX’s hinging of compensation on the already-existing fact of HIV

contamination made it act like a “present only” class action.

Structural Protections for Future Claimants. None of the cases provided

structures specifically designed to protect the interests of future claimants in

the settlement process. In two of the cases (Ahearn and Factor VIII or IX )

guardian ad litems were appointed, although in Factor VIII or IX the

guardian was appointed only to represent the interests of HIV-infected minors, and in Ahearn the guardian represented the interests of all class members rather than the particular interests of future class members. In a third

case (Georgine), a special master performed a comparable function of investigating whether the interests of class members had been adequately represented in relation to the class counsel’s present clients, but the investigation

was limited in scope. In Georgine, the AFL-CIO and a special counsel were

also appointed to ensure that the defendants performed their post-approval

obligations under the settlement in good faith.

Front-End Opt Outs. Four of the five cases were Rule (b)() opt-out

class actions; Ahearn was a mandatory Rule (b)()(B) class action. In the

four opt-out cases, significant numbers—ranging from  (out of ,)

in Factor VIII or IX to , (out of several hundred thousand to several

million) in Georgine—did opt out. With the exception of the revised settlement in Silicone Gel, in which nearly , of , class members
Executive Summary 

opted out, no more than % of the class members ultimately opted out in

any of the cases.4

Back-End Opt Outs. In some fashion or other, four of the settlements

permitted claimants a back-end opt-out into the tort system; the revised

settlement in Silicone Gel and the settlement in Factor VIII or IX did not.

The most restrictive opt-out right was that of the original settlement in Silicone Gel, which authorized opt outs only if the promised compensation was

not available in a given year and (for future claims) limited opt-out claimants’ claims for damages. The next most restrictive opt-out right was that of

Georgine, which limited the number of persons that could opt out each year

and also required the sacrifice of certain legal rights (such as loss of claims

for punitive damages and for fear of cancer).5 Ahearn was next in order;

there were no limitations on numbers of opt-outs, although its limitations

on legal rights (such as no punitive damages, , cap, and several liability) were more severe than those in Georgine. The least restrictive were

Silicone Gel’s revised settlement and Bowling. In the revised Silicone Gel settlement, claimants were not required to exercise their opt-out right until

they were told exactly what they would get by way of settlement. Bowling

allowed future claimants who sustained an injury to exit freely to the tort

system, although it did develop a voluntary alternative compensation

scheme as an incentive not to do so.

Class Certification Issues

Disputes Concerning Class Certification. Three of the five cases (Bowling,

Georgine, and Ahearn ) involved serious, sustained challenges to class certification. The other two (Silicone Gel and Factor VIII or IX ) did not.

Adequacy of Class Representatives, Including Separate Classes or Subclasses.

The adequacy of the class representatives is a critical issue in class action

practice; a class member can be bound by a class settlement or judgment

only if his or her interests have been represented by a person with comparable interests. In none of the cases was there a class representative for each

relevant “interest group.” For instance, in Georgine, relevant settlement “interest groups” included persons with mesothelioma, persons with lung cancer, persons with other cancers, persons with asbestosis or bilateral pleural

. This assumes that the class in Georgine numbered , or more, which seems

likely.

. In Georgine, certain benefits, such as the defendants’ waiver of most defenses, were

received in return for this sacrifice.
 Mass Tort Settlement Class Actions

thickening, a range of exposed persons not fitting into these categories, and

persons able to assert derivative claims. Given the risk of insolvency and the

limited protections against inflation, each of these “interest groups” would

then have required further subdivision into present, “near future,” and “far

future” claimants. And then there would likely needed to have been a further subdivision by state, or at least by groups of states with roughly comparable laws on liability and damages. Neither Georgine nor any of the other

cases contained an adequate number and/or mix of class representatives to

assure representation of all points of view.

Of the three cases in which class certification was heavily contested

(Bowling, Georgine, and Ahearn ), two (Georgine and Ahearn ) involved serious allegations that the representatives had conflicts of interest or too narrow a set of interests to represent adequately the interests of the class.

One way to try to assure adequate representation of different interests is

the use of separate classes or subclasses. None of the five cases involved

separate classes or subclasses.

Adequacy of Counsel. In every case but Bowling, class counsel represented

significant numbers of presently injured clients, in addition to their representation of uninjured or unfiled class members. Adequacy of counsel was

seriously contested in thbee cases (Bowling, Georgine, and Ahearn ). In Bowling, the main concern was competence of class counsel, who had never before handled a heart-valve case. In Georgine and Ahearn, the main concerns

were the possible conflicts of class counsel, who represented (either simultaneously or sequentially) present claimants not in the class and future claimants in the class. Only in Silicone Gel was separate legal representation provided for differing interest groups within the class, and even in that case, the

only interest group for whom a lawyer was appointed was the group of foreign claimants.

Collusion. Related to adequacy of counsel, the issue of collusion was

pressed in two cases (Bowling and Georgine ) . The issue seems to have fizzled

out in Ahearn. Both Bowling and Georgine analyzed the issue in terms of

whether class counsel had sought to defraud class members of their legal

rights. The other cases, in which collusion was not seriously litigated, mentioned the lack of collusion in passing. These cases treated “arm’s-length” or

“hard-fought” bargaining as sufficient evidence of the absence of collusion.

Consistency with Amchem. All of the cases in the study were resolved before the Supreme Court’s decision in Amchem. With the exception of Factor

VIII or IX, whose discussion regarding class certification was perfunctory, all

of the cases contained at least minor, and in some cases major, variations

from the holdings, language, or reasoning of Amchem.
Executive Summary 

Class Notice

Procedure. The mechanics of notice varied dramatically from case to case.

The most exhaustive, and expensive, notice occurred in Ahearn. The next

most extensive occurred in Georgine. In the remaining cases, notice was considerably less extensive, especially in terms of substituted notice, such as advertising and publication. In three of the cases (Georgine, Ahearn, and Silicone Gel ) , television advertising was used; in the other two it was not. In

two cases (Silicone Gel and Factor VIII or IX ) , there was extensive publicity

and networking regarding the litigation and settlement. In four of the cases

(Georgine, Ahearn, Silicone Gel, and Factor VIII or IX ), the defendants or

their insurers paid for the notice or created a fund from which notice costs

were paid. In Bowling the defendant paid part of the cost of the notice, and

the remainder came out of settlement funds.

All the cases except Bowling used toll-free phone numbers. Most used

summary devices such as question-and-answer booklets. Silicone Gel and

Factor VIII or IX also used the Internet as a means of providing notice. All

five cases also relied on public interest groups or private foundations to help

spread the notice.

Content. The content of the forms varied markedly in terms of the simplicity of the language, the user-friendliness, the visual appeal, and the

amount of information contained. None of the notices contained information on the likely prospects of a recovery in litigation for a person with a

particular disease profile. Only Ahearn developed information from which

class members could discern potential conflicts of interest between class

members and class counsel.

Fairness Hearing

Two of the cases (Georgine and Ahearn) permitted broad rights of discovery

to objecting parties and used trial-like procedures at the fairness hearing.

The others did not. The strongest challenges to the settlement occurred in

Georgine and Ahearn, which were the most mature of the mass torts and

therefore directly affected many members of the plaintiffs’ bar.

Approval of Settlement

In all five cases the settlement was approved by the district court. In four of

the cases, the judge to whom the litigation was assigned handled the fairness

hearing; in Georgine a different judge was assigned. In Ahearn, the judge

appointed another judge to facilitate the settlement.
 Mass Tort Settlement Class Actions

All the courts used some variant of a “fair, reasonable, and adequate” test

to measure the settlement’s fairness. The factors used by the court to flesh

out this standard varied. All but Silicone Gel listed a group of factors that

the court used to guide its decision. For the most part, the factors used by

the courts overlapped, although there were some differences on some of the

lists. The core factors, however, included the strength of the plaintiffs’ case

in relation to the settlement, the maturity of the litigation, the complexity

of the case, and the objections to the settlement. Collusion was also frequently mentioned. Bowling and Georgine stated that the “strength of the

case” factor was the primary consideration; the other cases did not prioritize

the factors.

In none of the cases, in my estimation, did the courts adequately analyze

the factors that were identified as being relevant. In only Bowling and Factor

VIII or IX did the courts analyze in detail the likelihood of a plaintiff’s recovery in the tort system or compare that recovery to the recovery promised

under the settlement. The opinions tended to emphasize factors that favored settlement approval, and downplayed the remainder. For instance, in

Bowling, in which the litigation was immature, the court essentially dismissed the maturity factor. In Ahearn, in which the litigation was mature,

the court relied heavily on the maturity factor. Since there was little consistency in the use or weighting of factors across the cases, the factors that were

cited as being relevant to approval were fairly poor predictors of the outcome of the trial court’s decisions.

Negotiated Changes from Tort System

One of the concerns of mass tort settlements is that they establish, for large

numbers of individuals, a type of private tort reform without the standard

legislative protections.6

 Although this concern must be tempered by the reality that nearly all tort settlements involve departures from the recoveries

available in a tort judgment, the cases under study reflected some common

patterns suggesting that the concern is not without foundation.

Consortium and Derivative Claims. In only one of the settlements (Bowling) was a separate fund established to compensate consortium claims, and

even in this case such a fund was created only after a round of negotiations

that was spurred on by the complaints of objectors and the concerns of the

. For one statement of this concern, see In re Asbestos Litig.,  F.d , – (th

Cir. ) (Smith, J., dissenting).
Executive Summary 

trial judge. In a second settlement (the original settlement in Silicone Gel ),

the judge indicated that one of the designated funds might be used to pay

some particularly compelling consortium claims, but never worked out the

details of this proposal. In a third settlement (Factor VIII or IX ) , consortium and other derivative claims were payable from the settlement, but they

reduced the amount of money that was available to the primary victim. In

neither Georgine, Ahearn, nor the revised settlement in Silicone Gel were

consortium or derivative claims compensable.

Emotional Distress and Related Claims. In all five cases, class members

had by definition been previously exposed to the allegedly defective product. Some or all of the class members in each of these cases were presently

healthy and asymptomatic, but they nonetheless may have been able to assert tort claims for emotional distress, fear of cancer, increased risk of cancer, medical monitoring, or related claims that are gaining increasing recognition in the tort system. Among the settlements, Bowling, the revised settlement in Silicone Gel, and Factor VIII or IX provided some compensation

for these claims. In none of these cases, however, was compensation tied to

actual emotional distress that was suffered by claimants. Moreover, in Silicone Gel this compensation was called an “advance payment,” and was deducted from any additional recoveries due to those who suffered additional

injuries; in Factor VIII or IX the flat , payment was the same for

those presently suffering only emotional distress and for those who were

suffering more serious injury or had died. In the three settlements that

compensated these claims, the payment seemed more designed as an inducement to class members to remain in the class rather than as a serious

effort to award damages for emotional distress.

Physical Injuries. In two of the settlements (Georgine and the original

settlement in Silicone Gel, although the revised Silicone Gel settlement

would have been subject to the same criticism), there were serious allegations that the settlement did not provide compensation for all of the physical injuries that were compensable in the tort system. Both Georgine and the

original settlement in Silicone Gel contained provisos that permitted “nonscheduled” diseases to be compensated in certain circumstances, although it

is not clear how effective these provisos would have been in practice.

Punitive Damages. None of the settlements permitted an award of punitive damages. Back-end opt-outs in Bowling and current claimant back-end

opt-outs in the original settlement in Silicone Gel retained the right to sue

for punitive damages; ongoing claimant back-end opt-outs in the original

Silicone Gel settlement and the back-end opt-outs in Georgine and Ahearn

could not assert punitive damages.
 Mass Tort Settlement Class Actions

Limitations on Compensatory Damages. Of the four cases permitting backend opt-outs, only one (Ahearn) put a cap (of ,) on the amount of

compensatory damages recoverable at trial. Likewise, of the three multidefendant cases that permitted back-end opt-outs (Georgine, Ahearn, and Silicone Gel ), only Ahearn changed the joint and several liability rule that prevails in many states into a several liability rule.

Waiver of Defenses in Back-End Opt-Out Trials. The settlements generally

waived the statute of limitations for back-end opt-outs. Only in Georgine

did the defendants agree to waive significant other defenses that they had;

in the other cases, trials were to be fully contested on issues of liability and

damage.

Nationalizing Tort Law. Of the five settlements, only Georgine and

Ahearn accounted for state law differentials in the award of damages under

the settlement. In neither of these cases, however, was state law a leading

determinant of the settlement award; rather the difference in state law was

merely one factor that went into the decision about the award. In the remaining cases, differences in state law were not considered in determining

the amount of compensation. In the cases permitting back-end opt-out trials, however, state law generally determined the entitlement to and amount

of recovery (although in Georgine defendants waived many state law defenses and in Ahearn doctrinal changes and damage caps imposed limits on

recovery under state law).

Alternative Dispute Resolution Procedures. Three of the settlements (Bowling, Georgine, and Ahearn) developed ADR procedures to keep back-end

opt-out claims out of the legal system. In Bowling, the ADR approaches

were optional; in Georgine and Ahearn they were mandatory prerequisites to

filing suit.

Attorneys’ Fees

In only one settlement (Bowling ) was class counsel to be paid from the settlement fund itself. In two of the settlements (the original settlement in Silicone Gel and Factor VIII or IX ), a separate fund was established for the

payment of class counsel’s fees, although in Silicone Gel, no definite amount

of money was allocated to the fund. In three of the settlements (Georgine,

Ahearn, and the revised settlement in Silicone Gel ) , defendants agreed to

pay class counsel’s fees (or at least contribute to a common benefit fund)

without the explicit establishment of a fund for the purpose. In two of these

latter settlements (Georgine and Ahearn), recovery was capped at a maximum of %, although no floor was established. In the last settlement (the
Executive Summary 

revised settlement in Silicone Gel ), a flat amount of % was contributed to

a common benefit fund.

In each case, individual counsel were also entitled to receive compensation for processing claims through the compensation mechanism established

by the settlement. In every case but Bowling, caps were imposed on these

awards. The cap in the revised settlement in Silicone Gel was a sliding scale

cap; the cap in the other settlements was a flat cap (typically a maximum of

%).

Policy Issues

A triumvirate of policy concerns—individual autonomy, extortionate use,

and unmanageability—often shape the contours of class-action practice. In

theory, the first of these concerns should be heightened in the context of the

mass tort settlement class action, while the latter two should be reduced.7

To the extent that such policy variables are measurable, these intuitions appear true.

Individual Autonomy. Issues of individual autonomy—such as the inadequacy of the representation by named representatives, the inadequacy of the

representation by class counsel, the existence of collusion, and the presence

of ethical conflicts—were present in all five cases and were seriously pressed

in three of them (Bowling, Georgine, and Ahearn). In none of the cases did

the trial court find that such concerns required denial of class certification

or disapproval of the settlement, although these concerns did ultimately

lead to the reversal in Georgine and the affirmance of that reversal in Amchem. In light of the subsequent Amchem decision, it is not clear whether

any of the trial court decisions adequately valued the interests in individual

autonomy.

Extortionate Use. Concerns with extortionate use seem not to have played

a significant role in the cases under study. In three of the cases (Bowling,

Georgine, and Ahearn ), the defendants’ desire for a global resolution led

them either to propose a class settlement themselves or at least actively to

embrace the idea. In only one of the cases (Silicone Gel ) was a settlement

decision made when a litigation class had already been certified, although

this class action did not seem to exert undue influence on the defendants’

. For an analysis of these policy concerns and their application to mass tort settlement

class actions, see Jay Tidmarsh, Mass Tort Settlement Class Actions: Five Case Studies and

Their Implications for the Reform of Rule  – (unpublished manuscript ) (copy on

file with Information Services Office, Federal Judicial Center).
 Mass Tort Settlement Class Actions

decision to settle. In a second case (Bowling ) , a motion to certify a litigation

class action was pending when the settlement was agreed upon; although

this motion may have influenced the timing of the settlement, there are no

external indicia that this motion induced an otherwise unlikely settlement.

In Factor VIII or IX, the Seventh Circuit had already ruled that a litigation

class could not be certified, so that the fear of an extortionate litigation class

action in federal court could clearly have not influenced the decision to settle the case. On the other hand, in two of the settlements (Bowling and Factor VIII or IX ) , class members tended to fare much better than they had

fared in prior litigation.

Unmanageability. Three of the five cases (Georgine, Ahearn, and Silicone

Gel) posed significant problems of pretrial, trial, and remedial management

that were alleviated by the class settlement; the remaining two (Bowling and

Factor VIII or IX ) contained smaller numbers of class members and seemed

to be less taxing to the federal judiciary. None of the settlements appeared

to pose comparable management problems. In particular, none of the settlements imposed significant post-settlement responsibilities on the court,

although in Bowling, Silicone Gel, and Factor VIII or IX, the court was involved as an ultimate arbiter of the claim administrator’s decision to deny

individual claims. In Bowling this role was quite limited; the court became

involved only when a class member had been denied eligibility under the

explantation benefit.

Summary

The following chart summarizes the main features of each case:8

Bowling

Georgine/

Amchem Ahearn

Silicone Gel

(original)

Silicone Gel

(revised)

Factor VIII

or IX

Product Heart valve Asbestos Asbestos Breast

implant

Breast

implant

Plasma

concentrate

Class type (b)() (b)() (b)()(B) (b)() (b)() (b)()

Number in

class

(approx.)

, ,–

millions

,–

millions

, Unknown;

at least

,

,

. The chart should be read in conjunction with the foregoing synthesis and the ensuing

case studies on which the synthesis relies. In the interest of presenting information in a

tabular form, some subtleties were omitted.
Executive Summary 

Bowling

Georgine/

Amchem Ahearn

Silicone Gel

(original)

Silicone Gel

(revised)

Factor VIII

or IX

Citizenship

of class

members

Worldwide U.S. only U.S. only Worldwide,

except for

Australia

and parts of

Canada

Worldwide,

except for

Australia

and parts of

Canada

U.S. only

Number of

opt outs

(approx.)

, , Not

applicable

, , 

Subclasses

or separate

classes

No No No No No No

Composition of classFuture

plaintiffs

only

Present and

future

plaintiffs

Present and

future

plaintiffs

Present and

future

plaintiffs

Present and

future

plaintiffs

Present and

future

plaintiffs

Representation by

class counsel

of present

claimants

No, at least

by lead class

counsel

Yes; present

claimants

settled

separately

Yes; present

claimants

settled

separately

Yes; present

claimants

included in

settlement

Yes; present

claimants

included in

settlement

Yes; present

claimants

included in

settlement

Protection

for future

plaintiffs

None Very limited; special

master

Limited;

guardian ad

litem

None None Very limited; guardian ad litem

for minors

Number of

defendants

     

Maturity of

litigation

Relatively

immature,

although

fracture

cases more

mature

Mature Mature Relatively

immature

Relatively

immature

Relatively

immature

Class

certified

Yes Yes Yes Yes Previous

class certification still

pertained

Yes

Settlement

approved

Yes Yes Yes Yes Yes Yes

Outcome on

appeal

Appeal

dismissed

due to

appellants’

failure to

intervene

Certification

reversed;

reversal

affirmed on

certiorari

Affirmed;

vacated and

remanded

on certiorari; affirmed on

remand

Appeal

dismissed as

moot

Presently on

appeal

Appeal

dismissed

due to

settlement

with appellants

Consistency of trial

court decision with

Amchem

Some

inconsistency

Inconsistent Some

inconsistency,

especially in

decision of

court of

appeals

Some

inconsistency

Prior certification still

pertained;

thus, some

inconsistency

Unable to

determine
 Mass Tort Settlement Class Actions

Bowling

Georgine/

Amchem Ahearn

Silicone Gel

(original)

Silicone Gel

(revised)

Factor VIII

or IX

Challenge to

adequacy of

plaintiff

representation

Yes Yes Yes Limited;

related to

lack of

foreign

representatives

Not

applicable

No

Challenge to

adequacy of

counsel

Yes Yes Yes No Not

applicable

No

Allegations

of collusion

Yes Yes Yes, though

not on

appeal

No Not

applicable

No

Nature of

fairness

hearing

Essentially

nonadversarial

Adversarial Adversarial NonadversarialNot

applicable

Nonadversarial

Length of

fairness

hearing

 days  days  days (for

three sets of

hearings)

 days Not

applicable

 days

Nature of

discovery

Limited and

informal

Broad rights

of discovery

Full rights

of discovery

Informal Not

applicable

Informal

Standard for

approval of

settlement

Fair, adequate, and

reasonable;

four-factor

test9

Fair, adequate, and

reasonable;

four-factor

test10

Fair, adequate, and

reasonable;

six-factor

test11

Fair, adequate, and

reasonable;

no factors

used

No test

developed

Fair and

reasonable;

five-factor

test12

Trust

mechanism

used

No No Yes No No No

. The factors were strength of plaintiffs’ case in relation to amount of relief; presence of

collusion; objections from class members; and amount and nature of discovery undertaken in

the case.

. The factors were strength of claims against benefits to class members; stage of proceedings and amount of discovery conducted; reaction of class; and how and by whom settlement was negotiated.

. The factors were existence of fraud or collusion; complexity, expense, and likely duration of litigation; stage of proceedings and amount of discovery completed; probability of

plaintiffs’ success on the merits; range of possible recovery; and opinions of class counsel,

class representatives, and absent class members.

. The factors were the strength of the plaintiffs’ case on the merits; the stage of the proceedings and the amount of discovery completed; the complexity, length, and expenses of

continued proceedings; the absence of collusion and the opinion of competent counsel; and

the degree of opposition to the settlement.
Executive Summary 

Bowling

Georgine/

Amchem Ahearn

Silicone Gel

(original)

Silicone Gel

(revised)

Factor VIII

or IX

Amount of

notice by

first-class

mail (out of

total number of class

members)

,–

, (out

of ,)

, or

more13 (out

of ,

to millions)

,,

(out of

, to

millions)

More than

,

(out of

,)

None prior

to settlement approval;

,

notices

thereafter

(out of

,)

Not determined in

this study

Other notice

methods

Newspaper;

magazine;

heart valve

registry

Newspaper;

magazine;

television;

radio (unpaid);

unions;

lawyers; tollfree number

Newspaper;

magazine;

television;

radio (unpaid);

unions;

AARP;

lawyers; tollfree number

Newspaper;

magazine;

television;

radio (unpaid);

registries

and physicians;

Internet;

toll-free

number

None; class

already

identified

from prior

submission

of claims;

toll-free

number

Magazine;

Internet;

hemophilia

organization; tollfree number

Cost of

notice and

source of

payment

At least .

million;

some from

settlement

funds, some

from defendant

 million;

defendants

 million;

insurers

Several

million

dollars;

defendants

Cost and

source not

determined

Cost not

determined; fund

established

by defendants

Back-end

opt-out;

limitations

on exercise

Yes; no

limits on

numbers or

legal issues

Yes; significant limits

on numbers

and legal

issues

Yes; limits

only on legal

issues

Yes; limits

on numbers

and legal

issues,

especially

for ongoing

claims

No backend opt-out

right

No backend opt-out

right

Emotional

distress

claims

compensable

Yes No No No Arguably yes Yes, although no

additional

amounts for

physical

injury

Limits on

consortium

and derivative claims

Yes; separate

fund

No No Generally

no; separate

fund to

compensate

a few

No Yes, though

these claims

reduce

award to

victim

Limits on

claims for

physical

injury

No Yes No Arguably

yes, but

science

unclear

Arguably

yes, but

science

unclear

No, but

physical

injury not

relevant to

award

. An individual notice or a short description of the notice in the mail. Full notice was

mailed to . million persons. Full notice materials were sent to , persons.
 Mass Tort Settlement Class Actions

Bowling

Georgine/

Amchem Ahearn

Silicone Gel

(original)

Silicone Gel

(revised)

Factor VIII

or IX

Limits on

numbers of

claims that

could be

asserted

against fund

No No, but

limited

number

compensable each

year

No; but

spendthrift

provisions

limited

number

compensable

each year

No; but

benefits

ratcheted

down if

excessive

claims

asserted in

given year

No No

State law

differentials

accounted

for in

settlement

No Yes, in

limited way

Yes, in

limited way

No No No

Source of

payment of

class counsel’s fees

Settlement

funds

Defendants Insurers Designated

portion of

settlement

fund

Defendants Separate

fund

Amount of

class counsel’s fees

Not specified in

settlement;

actual award

was % of

present

value of

settlement

and up to

% of

future

contributions; .

million

awarded so

far

Maximum

of %

specified in

settlement;

no final

award made

Maximum

of %

specified in

settlement;

more than

 million

awarded

Not specified in

settlement;

never

awarded

% of

amount of

settlement

proceeds to

common

benefit

fund; not

yet awarded

Not specified in

settlement;

recoverable

only from

 million

fund established for

various

purposes

Limits on

awards of

individual

attorneys’

fees

None % % None

specified in

settlement;

court limited to

maximum

of %

Sliding scale

of % of

first

,;

.% of

next

,;

% of

amounts

thereafter

None

specified in

settlement


Introduction

This monograph examines five cases in which Rule  of the Federal Rules

of Civil Procedure has been used to achieve a settlement of a mass tort controversy. The reason for studying mass tort settlement class actions is simple: Using class actions for this purpose has been, and is, controversial. The

mass tort settlement class action was the subject of a significant decision in

the last term of the Supreme Court,14 and it is also the subject of a proposed

amendment to Rule  that has been under consideration by the Advisory

Committee on the Federal Rules of Civil Procedure.15 There has been considerable debate both about the idea of settlement class actions in general16

and about the proposed amendment in particular.17 There have also been a

number of case studies or anecdotal descriptions about mass torts in which

settlement classes have been used.18 Thus far, however, the studies and de-

. Amchem Prods., Inc. v. Windsor,  U.S. — ,  S. Ct.  ().

. The proposal would add a new Rule (b)(), which provides that a class action can

be maintained if “the parties to a settlement request certification under subdivision (b)() for

purposes of settlement, even though the requirements of subdivision (b)() might not be met

for purposes of trial.”  S. Ct. No.  CXIX, CLIV to CLV. Certain amendments to Rule

(b)() that would affect the decision to grant the Rule (b)() request are also pending

before the Advisory Committee. Id. at CLIII to CLIV.

. See, e.g., Symposium, Mass Tortes: Serving Up Just Desserts,  Cornell L. Rev. 

(); John C. Coffee, Jr., Class Wars: The Dilemma of the Mass Tort Class Action,  Colum.

L. Rev.  (); Richard A. Nagareda, Turning from Tort to Administration,  Mich. L.

Rev.  ().

. See, e.g., Letter from Steering Committee to Oppose Proposed Rule  (May ,

) (letter signed by  law professors) (on file with Information Services Office, Federal

Judicial Center).

. See Ronald J. Bacigal, The Limits of Litigation () (Dalkon Shield litigation); Coffee, supra note , at – (Amchem asbestos litigation, Ahearn asbestos litigation, Silicone Gel breast-implant litigation); Susan P. Koniak, Feasting While the Widow Weeps:

Georgine v. Amchem Products, Inc.,  Cornell L. Rev.  () (Amchem asbestos litigation); Nagareda, supra note  (same); Brian Wolfman & Alan Morrison, Representing the

Unrepresented in Class Actions Seeking Monetary Relief,  N.Y.U. L. Rev.  () (Amchem

asbestos litigation, Silicone Gel breast implant litigation); Deborah R. Hensler & Mark A.

Peterson, Understanding Mass Personal Injury Litigation: A Socio-Legal Analysis,  Brook. L.
 Mass Tort Settlement Class Actions

scriptions have been narrowly focused on only one case or on only some of

the issues relevant to the propriety of settlement class actions.

The underlying study on which the present monograph is based attempted a more complete analysis of five mass torts in which federal courts

have used settlement class actions during the s.19 The five cases are

Bowling v. Pfizer, Inc., which involved allegedly defective heart valves;

Georgine v. Amchem Products, Inc., which arose out of the multidistrict asbestos proceedings;20 Ahearn v. Fibreboard Corp., which involved a settlement against a single asbestos manufacturer in Texas; In re Silicone Gel

Breast Implant Products Liability Litigation, which involved, obviously, silicone gel breast implants; and In re Factor VIII or IX Concentrate Blood

Products Litigation, which involved HIV-contaminated blood products used

by persons with hemophilia. After an examination of the policy implications and historical background of mass tort settlement class actions, the

study analyzed each of the five cases according to a series of general categories: Nature of Litigation and Litigation Maturity; History of the Lawsuit;

Party Structure; Attorneys; Settlement Terms; Negotiation History; Handling of Future Claimants; Notice Procedure; Approval and Review Process;

Attorneys’ Fees; and Modifications in Traditional Adversarial Roles.21 In

each case, information relevant to the categories was fleshed out by reading

the settlement agreement(s), notice materials, and reported decisions in the

case.22 Other sources of information included case briefs, pleadings, and

exhibits filed by the parties; docket sheets and other court records; newspaper and magazine articles; and academic literature. Although these sources

tended to answer many questions, they did not answer all. As a result, lawyers familiar with the cases were contacted, both to obtain new information

Rev.  () (Bowling heart-valve litigation, Silicone Gel breast-implant litigation); Thomas E. Willging, Synopsis and Issues in Bowling v. Pfizer: A Mass Tort Settlement Class

(unpublished manuscript) (copy on file with Research Division, Federal Judicial Center)

(Bowling heart-valve litigation). With the exception of the Dalkon Shield litigation, each of

the above cases is studied in more detail in this report.

. See Tidmarsh, supra note . Information for the underlying study and this monograph was accumulated through October , . Four of the cases were still active as of that

date. Because of time constraints in the preparation of this monograph, however, only a few

significant developments that have occurred after October , , are noted.

. On the shift in names used to describe the Georgine/Amchem litigation, see supra

note .

. These categories were developed from a series of issues and questions suggested by the

Federal Judicial Center.

. Including decisions reported on Westlaw and LEXIS.
Introduction 

and to check the accuracy of present information.23 The study concluded

with three chapters, the first of which summarized the findings of the case

studies, the second of which developed a set of standards that might be used

to consider the future of settlement class actions, and the last of which proposed language for Rule  that might implement these standards.

In order to make the basic terms of the debate accessible, the present

monograph presents in abbreviated form some of the historical and case

study materials. The monograph begins with a short history of mass tort

settlement class actions and a review of the Supreme Court’s decision in

Amchem Products, Inc. v. Windsor. The five succeeding sections then analyze

the five cases, with each section describing one case. The description focuses

on the history of the litigation, the basic settlement terms, the method for

handling future claims, notice procedures, approval and review process, and

modifications in the lawyers’ traditional adversarial roles.

As with the underlying study, the focus of this monograph is on the

work of the district courts that faced the difficult task of steering in the

largely uncharted waters of mass tort settlement class actions.

. In total, I spoke with eight attorneys: Gary Green (who represented objectors in

Bowling), Peter Hoffman (who represented a client in Factor VIII or IX ) , Peter Lockwood

(who served as counsel to class counsel in Ahearn), Alan Morrison (who represented objectors

in Silicone Gel ), Joseph Rice (who served as class counsel in Amchem and Ahearn and whose

firm was involved in Silicone Gel ), Brian Wolfman (who represented objectors in Bowling,

Amchem, and Ahearn), and two attorneys who preferred to remain anonymous. One of the

anonymous attorneys represented an insurer in Ahearn and another represented a nonsettling defendant in the Factor VIII or IX litigation. The reviewers to whom a draft of the

underlying study was sent were either participants in or intimately familiar with one or more

of the cases in the study. Their comments provided additional information and helped to

correct factual errors.


The Nature and History of Mass

Tort Settlement Class Actions

This chapter reviews the history and policy dimensions of mass tort settlement class actions. It begins by defining the term “settlement class action.”

It next describes briefly the history of the mass tort settlement class action,

which in turn leads to a more detailed analysis of Amchem Products, Inc. v.

Windsor.

Distinguishing Between Litigation and Settlement

Class Actions

The necessary starting point of this monograph is a definition of “settlement class action.” All class actions involve claims filed by or against parties

acting as representatives for similarly situated persons. The judgment or

settlement in a class action decides not only the claims and factual issues of

representatives that bring the suit, but also the claims and factual issues of

those persons (usually called class members) whom the representative is entitled to represent.

Although it shares this common bond with its more common cousin, the

“litigation class action,” the “settlement class action” achieves its binding

effect in a different manner. In a litigation class action, the function of the

class action is to litigate contested issues on a class-wide basis. With regard

to the factual and legal issues still to be resolved in the case, the parties occupy an adversarial relationship. By contrast, a settlement class action is intended not to litigate contested issues but to implement a settlement.24

. Within this general definition of settlement class actions, it is possible to distinguish

between lawsuits that were filed expressly for the purpose of giving effect to a settlement

previously agreed upon and lawsuits that were filed and litigated as non-class actions but that

were subsequently settled on a class-wide basis. Of the five cases in this study, three

(Georgine, Lindsey, and Walker) were filed for the purpose of giving effect to a settlement

already agreed upon; one (Ahearn) was filed for the purpose of giving effect to a settlement
 Mass Tort Settlement Class Actions

Typically defendant(s) agree to settle with putative class members before the

class certification decision is made.25 Although they may remain adversarial

with regard to the underlying factual and legal issues that animated the settlement, the parties do not occupy an adversarial relationship with respect

to the critical issues still to be resolved in the case—class certification and

settlement approval.26 Instead, they mutually desire the same outcome—to

bind the class representatives and members to the settlement.

A Short History of Mass Tort Settlement Class

Actions

“Litigation class actions,” as we now would call them, developed a distinct

procedural identity during the eighteenth century.27 Originally class actions

were equitable devices designed to ensure that large groups of individuals

with united interests would be able to enforce equitable rights or have equitable rights enforced against them;28 legal claims such as tort actions were

excluded. When the Federal Rules of Civil Procedure were adopted in ,

the original Rule  broadened the class action device to include claims for

legal relief, but the language of the rule made its use in tort cases problemagreed upon in principle; and one (Bowling) was filed for litigation purposes. Bowling settled

before a ruling on the certification of the class for litigation purposes, and was therefore converted into a settlement class action. Nothing in this report hinges on the motivation for

filing suit.

. It is also possible that a court might first certify a class for settlement purposes only,

with the parties exploring the possibility of settlement and ultimately agreeing to settlement

thereafter. None of the cases in this study involved this factual scenario. In Bowling, however,

the court approved of class counsel’s representation of a putative class during settlement negotiations that were being conducted while a motion to certify a litigation class was pending.

Similarly, in Ahearn, the court appointed counsel to negotiate a class-wide settlement before

suit was filed, and the final settlement documents were not signed until after the class action

complaint had been filed. See infra note  and accompanying text, and infra text following

note .

. Fed. R. Civ. P. (e) requires that a court approve all class settlements, after appropriate notice to the members of the class. Of course, in the event that class certification is

denied or the settlement is not approved, the parties might well occupy an adversarial relationship on the factual and legal issues surrounding liability and damages.

. See Stephen C. Yeazell, From Medieval Group Litigation to the Modern Class Action

– (). Since the concept of the settlement class action was unknown during the

eighteenth century, the label “litigation class action” is an anachronism. I use the label merely

to emphasize that settlement class actions have a more recent origin.

. See A Charles Alan Wright et al., Federal Practice & Procedure §  ().
The Nature and History of Mass Tort Settlement Class Actions 

atic.29 Whatever its precise breadth, however, the class action device was

seen as a device for litigating disputed issues, not as a device for settling

claims.

The overhaul of Rule  in  and the creation of a common question,

opt-out class action in Rule (b)() suggested a greater potential for the use

of class actions in mass tort controversies. Nevertheless, in part because of

the Advisory Committee’s caveat that mass torts are “ordinarily not appropriate” for class treatment,30 and in part because individual issues of liability, causation, and damage seemed to violate the doctrinal demands of Rules

(a) and (b), requests to certify mass tort litigation classes were routinely

unsuccessful during the first twenty years of the new rule’s operation.31

That lack of success changed during the s, as a series of cases certified

litigation classes32 and as defendants began to appreciate the value of global

solutions to mass tort disputes. Although most mass torts today are aggregated by other means (such as Rule  intradistrict consolidation or multidistrict transfer), certifying a litigation class in a mass tort is, at least in the

right circumstances, no longer unimaginable.

Some of these mass tort litigation class actions ultimately settled. For

instance, the Agent Orange litigation, which had been certified as a class

action for litigation purposes, ultimately settled on a class-wide basis in

.

33 During this same period, a number of courts in consumer rights,

securities, and antitrust cases began to certify settlement class actions when

the settlement was fair and reasonable.34 What remained, however, was to

. See id. § ; but see Kainz v. Anheuser-Busch, Inc.,  F.d ,  (th Cir.),

cert. denied,  U.S.  () (suggesting that tort cases could fit within the rule).

. Notes of the Advisory Committee on Rule  ().

. See, e.g., Hobbs v. Northeast Airlines,  F.R.D.  (E.D. Pa. ); In re Northern

Dist. of Cal. Dalkon Shield IUD Prods. Liab. Litig.,  F.d  ( th Cir. ), cert. denied,  U.S.  ().

. In re Federal Skywalk Cases,  F.R.D.  (W.D. Mo.), vacated,  F.d  (th

Cir.), cert. denied,  U.S.  (); In re Agent Orange Prod. Liab. Litig.,  F.R.D. 

(E.D.N.Y. ), aff’d,  F.d  (d Cir. ), cert. denied,  U.S.  (); Jenkins

v. Raymark Indus., Inc.,  F.d  (th Cir. ); In re School Asbestos Litig.,  F.d

,  (d Cir.) (“the trend has been for courts to be more receptive to use of the class

action in mass tort litigation”), cert. denied,  U.S.  ().

. See, e.g., In re Agent Orange Prod. Liab. Litig.,  F. Supp.  (E.D.N.Y. ),

aff’d,  F.d  (d Cir. ), cert. denied,  U.S.  ().

. See, e.g., Mars Steel Corp. v. Illinois Nat’l Bank and Trust Co. of Chicago,  F.d

 (th Cir. ) (settlement class in consumer rights case); Weinberger v. Kendrick, 

F.d  (d Cir. ) (settlement class in securities case), cert. denied,  U.S.  (); In
 Mass Tort Settlement Class Actions

marry the courts’ increased willingness to certify mass tort cases with their

increased willingness to use class actions for settlement purposes.

To my knowledge the first mass tort that sought treatment as a settlement class action was the Bendectin litigation, which had been consolidated

on a multidistrict basis before Judge Carl Rubin of the Southern District of

Ohio. A prospective settlement was agreed on during the trial of the consolidated cases during . The settlement called for the creation of a mandatory Rule (b)() class action comprised of all persons injured by exposure to Bendectin. Judge Rubin, who had previously denied a motion to

certify a litigation class action, subdivided the class into two parts (comprised of those persons that had already filed suit and those that had not)

and certified the class for settlement purposes. On a petition for a writ of

mandamus, the Sixth Circuit vacated Judge Rubin’s certification order,

holding that Rule (b)() could not be stretched to fit the facts of the

case.35 But the Sixth Circuit did not entirely dismiss the concept of a settlement class action, noting that “there is precedent for the proposition that

a class can be certified for settlement purposes only.”36

The first successful use of the mass tort settlement class action appears to

have occurred in . Olin Corporation, which had seen a prior non-class

settlement lead to a second round of , toxic tort claims filed against it,

ultimately agreed to settle the second round of claims for  million on one

condition: that the settlement occur as a Rule (b)() class action.37 Judge

U.W. Clemon of the Northern District of Alabama certified the class in

Hagood v. Olin Corp. The certification decision was never published, and

the final judgment never appealed. Hagood seems to have gone largely unnoticed in later cases.

re Beef Indus. Antitrust Litig.,  F.d  (th Cir. ) (settlement class in antitrust

case), cert. denied,  U.S.  (); see generally Herbert Newberg & Alba Conte, Newberg on Class Actions § . (d ed. ).

. See In re Bendectin Prods. Liab. Litig.,  F.d ,  n. (th Cir. ).

. Id. at  n.. Because it found that the class action could not be maintained on

other grounds, the court did not take a position on Judge Rubin’s implicit ruling that “the

standards for certifying a class are different depending on whether the class is for settlement

or whether it is for trial.” Id.

. The case is described in Francis E. McGovern & E. Allan Lind, The Discovery Survey,

 Law & Contemp. Probs.  (Autumn ), and Francis E. McGovern, The Alabama

DDT Settlement Fund,  Law & Contemp. Probs.  (Autumn ). According to McGovern and Lind, only three persons opted out of the settlement. McGovern & Lind, supra, at

.
The Nature and History of Mass Tort Settlement Class Actions 

The next use of a mass tort settlement class action occurred in , as a

part of the A.H. Robins reorganization proceedings. Judge Robert Merhige,

Jr. of the Eastern District of Virginia certified a mandatory Rule (b)()

class action of Dalkon Shield victims against Robins’ insurer.38 The objectors to the settlement specifically argued both that mass torts were not susceptible to class action treatment and that the use of Rule  to settle a mass

tort case was forbidden.39 Judge Merhige and the court of appeals rejected

both propositions, although the rather odd procedural circumstances of the

case (claims against an insurer rolled into the insured’s Chapter  reorganization) and the terms of the settlement itself (providing class members with

various payment options, including the ability to proceed to trial when injuries manifested themselves) made Robins sui generis as a precedent.

The idea of the mass tort settlement class action then lay dormant for

several more years,40 until four cases—Bowling v. Pfizer in , Amchem

and Ahearn in , and Silicone Gel in —employed settlement class

actions within the span of two years. After a two-year hiatus, during which

the Silicone Gel settlement disintegrated and the courts of appeal in Amchem

and Ahearn considered the appropriateness of mass tort settlement class actions, a fifth settlement class action—the Factor VIII or IX Concentrate litigation—was certified in . Bowling, Amchem, Ahearn, Silicone Gel, and

Factor VIII or IX form the study group for the present report.

In October , Judge Louis Bechtle approved a settlement class action

with respect to certain aspects of an eighth mass tort—In re Orthopedic Bone

Screw Products Liability Litigation.

41 Unfortunately, the timing of the decision in Orthopedic Bone Screw made it impossible to include the case within

the present study.

. See In re A.H. Robins Co.,  F.d  (th Cir.), cert. denied,  U.S.  ().

. Id. at –.

. “Dormant” may be a somewhat inaccurate description. During this time period

Judge Weinstein used a mandatory class action to restructure the failing Manville Trust,

which had been established to resolve Manville’s asbestos claims. See In re Joint E. and S.

Dist. Asbestos Litig.,  B.R. , (E.D.N.Y. & S.D.N.Y. ), vacated,  F.d  (d

Cir. ), modified on reh’g,  F.d  (d Cir. ). Although technically not a mass tort

settlement class action, the Manville case gave some impetus to later cases in the study. Manville was cited, for instance, by the district court, the Third Circuit, and the Supreme Court

in Amchem. See Georgine v. Amchem Prods., Inc.,  F.R.D. ,  (E.D. Pa. );

Georgine v. Amchem Prods., Inc.,  F.d ,  (d Cir. ); Amchem,  S. Ct. at .

It was also cited in Ahearn v. Fibreboard Corp.,  F.R.D. , , ,  (E.D. Tex.

).

. See In re Orthopedic Bone Screw Prods. Liab. Litig.,  F.R.D.  (E.D. Pa. ).
 Mass Tort Settlement Class Actions

The district court in each of these eight mass torts certified a class and

approved the settlement. Three of eight cases (Robins, Ahearn, and Orthopedic Bone Screw) were certified as mandatory class actions;42 the rest have

been opt-out class actions. 43 Five of the cases (Robins, Bowling, Amchem,

Ahearn, and Factor VIII or IX ) have been appealed.44 One (Robins) was affirmed on appeal;45 one (Amchem) was reversed on appeal;46 one (Ahearn)

was affirmed, vacated and remanded in light of Amchem, and affirmed again

on remand;47 the appeal in another ( Walker) was voluntarily dismissed;48

and in the last (Bowling), the objectors’ failure to intervene resulted in dismissal of the appeal.49

The impressive track record of settlement class certifications may have

been unfairly earned, at least to some degree. When several of the decisions

are read in light of the Supreme Court’s subsequent opinion in Amchem, a

number of the district courts appear to have committed a basic legal error:

They have assumed that the standard requirements of Rules (a) and (b)

are somewhat relaxed in the less adversarial, settlement-oriented context of

the settlement class action. This assumption, Amchem says, is unsound.

. In a mandatory class action, the class members do not have a right to opt out of the

class. See Fed. R. Civ. P. (b)(), (b)(); cf. Fed. R. Civ. P. (c)() (no opt-out right contemplated for Rule (b)() or (b)() class actions). A court may, however, have the discretion

to permit a person to opt out of a mandatory class action. See County of Suffolk v. Long

Island Lighting Co.,  F.d  (d Cir. ). Moreover, although no opt-out right is

provided for mandatory class actions, a constitutional right to opt out of at least some mandatory class actions may exist. The Supreme Court has twice granted certiorari to consider

the issue, but has thus far not resolved it. See Ticor Title Ins. Co. v. Brown,  U.S. 

(); Adams v. Robertson, — U.S. —,  S. Ct.  (). See generally Phillips Petroleum Co. v. Shutts,  U.S.  ().

. As its name implies, an opt-out class action is one in which class members have an

opportunity to opt out of the class. See Fed. R. Civ. P. (b)(). An adequate notice of the

opt-out right must be provided to class members. See Fed. R. Civ. P. (c)().

. I have not determined if a notice of appeal has been filed in Orthopedic Bone Screw.

. In re A.H. Robins Co.,  F.d .

. Georgine,  F.d , aff’d, Amchem,  S. Ct.  ().

. See In re Asbestos Litig.,  F.d  (th Cir. ), vacated and remanded sub nom.

Flanagan v. Ahearn,  S. Ct.  (), and Ortiz v. Fibreboard Corp.,  S. Ct. 

(), aff’d on remand,  F.d  (th Cir. ).

. See Stipulation to Dismiss, Otis v. Bayer Corp., No. -C- (th Cir., Jul.  , 

) (copy on file with court); Order of Dismissal, Otis v. Bayer Corp., No. -C- (th

Cir., Jul. , ) (copy on file with court); personal communication of author with office

of the Clerk of the Court for the Seventh Circuit.

. Bowling v. Pfizer, Inc.,  F.d  (Table),  WL  (th Cir. ), cert.

denied,  U.S.  ().
The Nature and History of Mass Tort Settlement Class Actions 

Amchem Products, Inc. v. Windsor

Amchem, which involved the settlement of thousands of asbestos claims by

twenty defendants, has established four propositions of importance to mass

tort settlement class actions.50 The first is that class actions can sometimes

be used to resolve mass tort controversies. When Rule (b)() was adopted

in , the committee notes to the rule stated that “mass accident” cases

presented significant individual issues and were thus “‘ordinarily not appropriate’ for class treatment.” 51 Although acknowledging that courts should

continue to exercise “caution when individual stakes are high and disparities

among class members great,” the Court did recognize that “the text of the

rule does not categorically exclude mass tort cases from class certification.”52

Thus, “mass tort cases arising from a common cause or disaster may, depending on the circumstances, satisfy the predominance requirement” of

Rule (b)().53 Although the view that Rule  was unavailable in mass

torts has been on the wane since the late s,

54 the Court’s acknowledgment and apparent blessing of the modern trend55 is important.

Unfortunately, the Court stopped well short of articulating the precise

significance of the proposition. It did not articulate the “circumstances”

under which mass tort class actions might be appropriate. Indeed, its apparent willingness to permit mass tort class actions with respect to a “common

cause or disaster” may in fact make it more difficult for mass torts that are

not based on a single calamitous event to receive class treatment. Moreover,

the Court’s apparent approval of mass tort class actions came in the specific

context of discussing one of the requirements of Rule (b)(). The Court

did not indicate whether other requirements in Rule (b)(), or in Rule

(a), might still make it impossible to maintain mass tort class actions.

The second proposition that can be derived from Amchem is that class

actions can sometimes be used to settle litigation. Here again, the Court

acknowledged that “the ‘settlement only’ class has become a stock device” in

. The decision in Amchem was –, with Justice Ginsburg writing the majority decision, Justice Breyer writing a dissent joined by Justice Stevens, and Justice O’Connor not

participating in the consideration or decision of the case.

. Amchem,  S. Ct. at , quoting  Advisory Committee Notes on Rule .

. Amchem,  S. Ct. at .

. Id.

. See supra note  and accompanying text.

. See Amchem,  S. Ct. at  (acknowledging that district courts have been certifying mass tort cases “in increasing numbers” since the s).
 Mass Tort Settlement Class Actions

federal courts.56 Although the Court made no express holding to this effect,

the entire thrust of its opinion is that settlement class actions can be used as

long as the case meets the requirements in the text of Rule .

57 For instance, as discussed in more detail below, the Court noted that, when

“[c]onfronted with a request for settlement-only class certification,” a court

may disregard some aspects of Rule (b)(), but should give “undiluted,

even heightened, attention in the settlement context” to other aspects of

Rule (b)(). It would have been unnecessary for the Court to provide this

guidance if settlement class actions were per se inappropriate.

Taking the first and second propositions together, it would seem that

Amchem imposes no absolute barrier to mass tort settlement class actions.

That fact is confirmed by the third proposition for which Amchem might be

read to stand: that a settlement class action such as Amchem must meet

most, but not all, of the requirements of litigation class actions. A corollary

of this proposition is that the fact of settlement is relevant at least in part in

determining whether the class-action requirements have been established.58

In this respect, Amchem disagrees with the Third Circuit’s prior interpretation of Rule , which had been that each of the requirements of Rule (a)

and (b)() had to be satisfied “without taking account of the settlement.”59 In particular, the Supreme Court stated that the requirement of

Rule (b)()(D), which suggests that class certification should be denied

when a class action would pose insurmountable management problems, had

no application in the context of a settlement class action in which the case

would not be litigated.60 Conversely, the Court stressed that the requirements of Rule  could not be ignored even when a settlement was substantively fair. This fairness inquiry, which is directed by Rule (e), “was designed to function as an additional requirement, not a superseding direction.”61 To read the requirements of Rules (a) and (b)() out of settlement

. Amchem,  S. Ct. at .

. See, e.g., id. at .

. Id. at  (“settlement is relevant to a class certification”).

. Georgine,  F.d at , quoting In re General Motors Corp. Pick-Up Truck Fuel

Tank Prods. Liab. Litig.,  F.d ,  (d Cir.), cert. denied,  U.S. — ,  S. Ct. 

(). Believing that the Third Circuit did not follow its own interpretation, but rather did

consider the settlement in making its ruling on class certification, the Court found no reversible error in the Third Circuit’s opinion. Amchem,  S. Ct. at .

. Amchem,  S. Ct. at .

. Id. The Court stressed that “[t]he safeguards provided by the Rule (a) and (b) classqualifying criteria, we emphasize, are not impractical impediments—checks shorn of utility—in the settlement class action context. . . . [T]he standards set for the protection of ab-
The Nature and History of Mass Tort Settlement Class Actions 

class actions would disregard the process for promulgating rules that Congress had established, and might abridge substantive rights in violation of

the Rules Enabling Act.62

The difficult question in applying this third proposition is deciding exactly which parts of Rule (a) and (b) can be de-emphasized in a settlement

class action, and which must be strictly complied with. The Court hinted at

the answer when it indicated that “other specifications of the rule—those

designed to protect absentees by blocking unwarranted or overbroad class

definitions—demand undiluted, even heightened, attention in the settlement context.” Moreover, the Court’s own holdings, which found that the

settlement in Amchem failed to meet the predominance requirement of Rule

(b)() and the adequacy of class representatives under Rule (a)(), suggest that these aspects of Rule  are among the provisions that require such

“undiluted, even heightened, attention.” Likewise, the Court’s insistence

that a settlement class action should be analyzed in terms “of the legal or

factual questions that qualify each class member’s case as a genuine controversy, questions that preexist any settlement,”63 seems to take direct aim at

the argument (used by some of the district courts in this study) that the

commonality and typicality requirements of Rules (a)() and (a)() are

satisfied in the settlement class action context because all class members

have a common interest in the settlement. On the other hand, the Court

noted that Amchem involved “no ‘limited fund’ capable of supporting class

treatment under Rule (b)()(B),” a point that at least raises a question

about whether mandatory settlement class actions might receive somewhat

different treatment than opt-out settlement class actions.64

The final proposition for which Amchem stands is that the decision to

certify a settlement class action in Georgine was erroneous. The Court found

two deficiencies in the Georgine class certification: The case failed to satisfy

sent class members serve to inhibit appraisals of the chancellor’s foot kind—class certifications dependent upon the court’s gestalt judgment or overarching impression of the settlement’s fairness.” Id.

. See  U.S.C. § (b) (Federal Rules of Civil Procedure “shall not . . . abridge any

substantive right”).

. Amchem,  S. Ct. at .

. Id. On remand in Ahearn, the Fifth Circuit reaffirmed its original order affirming the

trial court’s certification and approval decisions. It distinguished Amchem on two grounds,

one of which was that Amchem was not a Rule (b)() class action. The Fifth Circuit did not

analyze what the significance of Amchem might be in the Rule (b)() context. See Asbestos

Litig.,  F.d . Whether any mass tort seeking money damages can be certified as a

mandatory class action is equally uncertain. See supra note .
 Mass Tort Settlement Class Actions

the predominance requirement of Rule (b)(), and further failed to meet

the adequacy of class representation requirement of Rule (a)(). Aside

from an observation that the Georgine class action was “sprawling,” the

Court was unclear about exactly why the Georgine class failed to meet the

predominance requirement. 65 The Court quoted from the Third Circuit’s

opinion, which the Court stated had “made plain” the reasons that the class

failed to meet this requirement.66 In portions of the Third Circuit’s opinion

quoted by the Court, the Third Circuit emphasized the differences among

the products used and the differences among class members in terms of exposure to asbestos, medical histories, work histories, and contributing

causes, such as smoking.67 In other portions of the Third Circuit’s decision

not quoted by the Court, the Third Circuit also emphasized the lack of any

single event causing the injuries and the fact that “[n]o one operative set of

facts establishes liability.”68 Moreover, the upshot of the Third Circuit’s decision was that long-term mass torts could never satisfy the predominance

requirement unless the case involved “the centrality of a single issue.”69 It is

not clear, however, that the Court was accepting these latter portions of the

Third Circuit’s analysis.

The Court was somewhat clearer about the reasons that the class failed to

meet the Rule (a)() adequacy requirement: In certain regards, the interests of some class representatives and class members conflicted with the interests of other representatives and members. The class in Georgine had included both those with present asbestos injuries and those who might have

an asbestos injury in the future. Different plaintiffs had been exposed in

different ways in different places to different forms of asbestos made by different manufacturers. The Court thought that the “diverse medical conditions” made the task of the class representatives too difficult.70 The Court

also focused on the fact that the settlement made “essential allocation decisions designed to confine compensation and to limit defendants’ liability,”71

a fact that created potential conflicts of interest among class members. For

. Amchem,  S. Ct. at .

. Id.

. Georgine,  F.d at .

. Id. at .

. Id.

. Amchem,  S. Ct. at .

. Id.
The Nature and History of Mass Tort Settlement Class Actions 

example, the Court noted that exposure-only (or “future”) plaintiffs72

would want to protect the settlement fund against future inflation, while

the presently injured claimants would want large immediate payments.

Likewise, the court noted that the settlement made it more difficult for later

claimants to seek a trial, and had also eliminated consortium claims.73

Taken together, these divergent interests made it impossible for the class

representatives to represent the class adequately; the settlement contained

“no structural assurances of fair and adequate representation for the diverse

groups and individuals affected.”74

Amchem immediately followed this discussion with a quote from a Sec - 

ond Circuit opinion that suggested that subclasses might overcome some of

these conflict of interest problems.75 The Supreme Court did not, however,

suggest whether subclasses would necessarily have solved the problems of

adequacy of representation, or the exact shape of the subclasses that would

have had the best chance of doing so. Nor was it clear that properly substituted subclasses would overcome the Court’s other objection to the settlement: the lack of predominance of common issues.

Amchem closed with expressions of concern about the “highly problematic” matter of providing adequate notice to class members, some of whom

(such as future spouses and afterborn children) could not even know that

they were in the class and others of whom (such as those presently healthy)

may have lacked the information to make an intelligent decision to opt

out.76 Although suggesting that the notice in the case may have foundered

. In this report I use the term “future plaintiffs” to refer to ( ) plaintiffs that have not

yet suffered an injury that would be compensable when it manifests itself, and () spouses,

children, parents, and others that could file derivative claims should such an injury be manifested. Under this definition, “future plaintiffs” may possess some present claims—such as

emotional distress resulting from fear of injury, increased risk of injury, or medical monitoring—that are valid under state law. If no physical injury has yet occurred, however, they are

“future plaintiffs” with respect to their claims for physical injury. Future plaintiffs can be

subdivided into two groups: those who have already been exposed to defendants’ product or

conduct (the “present futures”), and those who have yet to be exposed (the “future futures”).

Except with regard to some derivative claimants who may not yet have been born or have

married a direct claimant, the settlements in this study involved “present futures”; none involved “future futures,” for whom issues such as justiciability and notice are problematic.

. Amchem,  S. Ct. at .

. Id.

. Id., citing Joint E. and S. Dist. Asbestos Litig.,  F.d at –.

. Amchem,  S. Ct. at .
 Mass Tort Settlement Class Actions

on the requirements of the Constitution and Rule , the Court declined to

rule on the matter.

Justice Breyer’s dissent took the majority to task for failing adequately to

defer to the trial court’s discretion in deciding to certify the class, for failing

adequately to consider the trial court’s detailed findings of fact on the adequacy and predominance issues, for failing adequately to consider the trial

court’s detailed findings of fact on the fairness of the settlement, and for

failing to appreciate the unique importance of a settlement that portended

an end to a significant portion of the costly and docket-clogging asbestos

controversy. The dissent closed with the observations that the issue of the

adequacy of notice was also one entrusted in the first instance to the trial

court, and that the trial court’s favorable finding on adequacy of notice

ought not be so “quickly disregarded.”77

As this monograph will demonstrate, some of the district courts in this

study failed to anticipate some of Amchem’s analysis, and may therefore

have committed (in the retrospective light of Amchem) certain legal errors in

their decisions certifying the settlement class actions.78 To suggest that some

of the courts may have committed legal error is not, however, the end of the

inquiry. With the exception of Amchem itself, some or all of the cases might

have been amenable to certification under Amchem’s more restrictive standards.79 Moreover, to the extent that Amchem precludes certification, legislation or amendments to the Federal Rules80 could remove all but the constitutional objections to certification.

The critical issues, therefore, are whether settlement class actions are a

good idea, and if so, what controls should be placed on them. Amchem establishes some of the baseline concerns: adequacy of representation, intraclass conflicts created by the litigation or settlement terms, the possibility of

subclasses, the predominance of common issues, and adequacy of notice.

The following five case studies are designed to help provide answers to these

questions and concerns by examining the workings of mass tort settlement

. Id. at .

. See infra notes –, –, –, –, – and accompanying text.

. See Amchem,  S. Ct. at  (citing Ahearn in favorable way); id. at  (citing

Ahearn in generally unfavorable way); id. at  (citing Ahearn dissent in favorable way).

. Of course, amendments to the Federal Rules are subject to the limitations of the

Rules Enabling Act. See  U.S.C. § (b) (rules of procedure “shall not abridge, enlarge

or modify any substantive right”). Amchem raised, but did not resolve, the issue of a settlement class action’s consistency with the Rules Enabling Act.  S. Ct. at , .
The Nature and History of Mass Tort Settlement Class Actions 

class actions in practice. Along with empirical data81 and theoretical discussion,82 the information in this study should provide useful data to those

who must chart a course for the future of mass tort settlement class actions.

As Judge Edward Becker remarked, “Every decade presents a few great cases

that force the judicial system to choose between forging a solution to a major social problem on the one hand, and preserving institutional values on

the other. [Amchem] is such a case.”83

. See, e.g., Thomas E. Willging et al., Empirical Study of Class Actions in Four Federal

District Courts (Federal Judicial Center ).

. See, e.g., sources cited supra note ; Symposium, The Institute of Judicial Administration Research Conference on Class Actions,  N.Y.U. L. Rev.  ().

. Georgine v. Amchem Prods., Inc.,  F.d ,  (d Cir. ), aff’d sub nom. Amchem Prods., Inc. v. Windsor,  S. Ct.  ().


Heart Valves: Bowling v. Pfizer,

Inc.

Introduction84

Between  and , Shiley, a wholly owned subsidiary of Pfizer, manufactured two Bjork-Shiley convex/concave heart valves that were intended

for implant into persons whose own heart valves were failing.85 Approximately , of these valves were implanted worldwide. Allegedly the

valves were defective and had an undue tendency to fracture.86 As of ,

approximately  of these valves had fractured, with approximately  of

the fractures resulting in death. Pfizer had a policy of confidentially settling

all fracture cases.

In addition, many persons with functioning heart valves thought that

they should be able to recover for the cost of “explantation” (removal of the

Bjork-Shiley valve and replacement with a different valve) and for increased

risk of death and/or emotional distress created by the knowledge that the

valve might fracture and cause death at any instant. Explantation, however,

was a risky procedure for which few were medically eligible. Moreover, as of

the date of the settlement’s approval in , twenty-seven cases in eleven

different jurisdictions had dismissed the emotional distress claims. In the

lone exception, a state appellate court in California had reversed a summary

judgment in , but the case had not yet gone to trial at the time that the

. With the exception of clarifying footnotes and citations for direct quotations, no

footnotes or other citations to record sources will be used in this case study. Persons interested in the sources for the factual assertions made in this case study should refer to Tidmarsh, supra note , at –.

. For the sake of convenience, Shiley and Pfizer will be usually referred to simply as

“Pfizer.”

. One of the valves, a -degree valve, allegedly had a higher fracture rate than the

other valve, a -degree valve.
 Mass Tort Settlement Class Actions

settlement was announced.87 As the district court said, “no court has ever

awarded a judgment in favor of a plaintiff with a properly functioning heart

valve.”88

The heart-valve litigation should therefore be regarded as relatively immature. The classic pattern of growth from immaturity to maturity consists

of three stages: Early victories for defendants, followed by breakthrough

victories for plaintiffs, followed by a fully mature equilibrium.89 In the heart

valve litigation, no fracture cases had yet been taken to verdict, although the

prior settlements gave some sense of the value of the fracture claims. The

appellate decision in California might have been the harbinger of the move

of the emotional distress claims to the second stage of breakthrough victories. Whether the litigation would ever have moved through this stage into a

mature equilibrium will never be known, for the settlement in Bowling effectively ended the controversy.

History of the Lawsuit

Bowling v. Pfizer was filed in the Southern District of Ohio on April ,

, as a litigation class action. On November , , while the class certification motion was under advisement, the lawyers for each side met with

Judge S. Arthur Spiegel, who presided over the case, to advise him that they

were close to settling the suit on a class-wide basis. Judge Spiegel “approved

of class counsel’s representation of a putative class in the ongoing negotiations.”90

On January , , the parties filed a Joint Motion for Conditional

Class Certification for Settlement Purposes, requesting certification under

Rule (b)() of a class comprised of () all recipients of either a -degree

or a -degree heart valve worldwide and () all spouses of recipients. As

finally amended, the complaint in Bowling included eight heart valve recipients and seven spouses. The complaint created no subclasses. Thus, implantees and spouses, -degree valve implantees and -degree valve implan-

. See Khan v. Shiley,  Cal. App. d ,  Cal. Rptr.  () (permitting fraud

claim for presently uninjured claimant to proceed).

. Bowling v. Pfizer, Inc.,  F.R.D. ,  (S.D. Ohio ) (emphasis in original).

. See generally Francis E. McGovern, Toward a Functional Approach for Managing

Complex Litigation,  U. Chi. L. Rev.  (); Francis E. McGovern, Resolving Mature

Mass Tort Litigation,  B.U. L. Rev.  ().

. Willging, supra note , at .
Heart Valves: Bowling v. Pfizer, Inc. 

tees, and implantees needing reoperation and those never needing such surgery were all represented by the same group of plaintiffs.

On January , Judge Spiegel conditionally certified the class, preliminarily approved the settlement, ordered notice to be sent to class members,

and set a fairness hearing on the proposed settlement for June , .

Prior to the fairness hearing certain objectors sought to obtain discovery

from class counsel and Pfizer in order to support their contention that class

counsel and Pfizer had colluded in the settlement. Interrogatories and some

document production were allowed, but Magistrate Judge Jack Sherman, to

whom the objectors’ motion to compel was referred, declined to permit

depositions—in part because he found no evidence of collusion. That ruling

was upheld by Judge Spiegel.91

Judge Spiegel conducted three days of fairness hearings on June , , and

, . The hearings consisted largely of presentations from plaintiffs’ and

defendants’ counsel, and from two law professors who spoke favorably

about the settlement. Limited cross-examination of the professors was permitted; otherwise, objectors were allowed to suggest questions that the court

might ask the presenters, but were not allowed to cross-examine the presenters. By the end of the second day, objectors were allowed to present

their objections. On the afternoon of the third day, Pfizer’s lawyers announced that further negotiations had resulted in certain changes to the

settlement generally favorable to the class. At that point, one objecting lawyer, representing  opt-outs, withdrew his objections to the settlement.

After rebuttal arguments by proponents of the settlement, Judge Spiegel

continued the hearings until July . In the interim, on June , he wrote a

memorandum describing certain ambiguities and difficulties that he perceived in the settlement.92 When the parties returned to the fairness hearings on July , they announced further changes in the settlement, many of

which were responsive to Judge Spiegel’s concerns. After presentation of the

changes, Judge Spiegel took a roll call of objectors. All but the objectors

from a putative class in Pennsylvania and from Public Citizen, a public interest organization, had withdrawn their objections.

. Bowling,  F.R.D. at  & n..

. Bowling v. Pfizer, Inc.,  F.R.D.  (S.D. Ohio ). Among the areas of concern

identified by Judge Spiegel were the lack of compensation to spouses of implantees, the lack

of notice in New Zealand, the handling of foreign claimants, the handling of explantation

cases, and the handling of attorneys’ fees. In addition, Judge Spiegel requested a two-page

summary of the main features of the settlement and the in camera production of prior valve

fracture settlements.
 Mass Tort Settlement Class Actions

On August , , Judge Spiegel issued the final order certifying the

class and approving the settlement.93

The Pennsylvania objectors sought valiantly to appeal from this final

order, only to discover that their failure formally to intervene in the litigation was fatal to their right to appeal.94

Settlement Terms

Class members had, or in the future might have, three distinct sets of claims

against Pfizer: () claims for emotional distress; () claims for reoperation to

replace the Bjork-Shiley heart valve; and () claims for physical injury or

death resulting from valve fracture. In addition, spouses of implantees could

assert claims for consortium.

Although the original settlement agreement made no provisions for consortium claims, it sought to address each of the remaining claims through

the establishment of two separate funds. The first fund, the Patient Benefit

Fund, consisted of  million. Approximately half of the fund was to be

used for research into diagnostic techniques to identify implantees who may

have a significant risk of strut fracture and research into ways of reducing

risks for valve replacement surgery; the remainder was to be spent on valve

replacement surgeries that met certain guidelines.

The second fund, the Medical and Psychological Consultation Fund,

initially consisted of  million, and was designed to pay class members for

their emotional distress. The parties expected that approximately , of

the , class members would file a claim against the fund, meaning that

each claiming member would receive ,. In the event that more than

, claims were received, Pfizer agreed to pay , per claim for the

next , claims, , for the next ,, , for the next ,, and

 per claim thereafter. Thus, the total amount of Pfizer’s obligations under this fund might have approached or exceeded  million. Since the

fund was to be divided equally among the claimants, the precise amount

available to each claimant was uncertain at the time that class members

. Bowling,  F.R.D. .

. See Bowling v. Pfizer, Inc.,  F.d  (Table),  WL  (th Cir. )

(dismissing appeal for lack of standing due to failure to intervene), cert. denied,  U.S. 

(); Id. at  (affirming that trial court had no jurisdiction to entertain motion to

intervene while case was on appeal); Bowling,  F.R.D.  (denying post-appeal motion to

intervene), aff’d,  F.d  (Table),  WL  (th Cir. ), cert. denied, — U.S.

— ,  S. Ct.  ().
Heart Valves: Bowling v. Pfizer, Inc. 

needed to make their opt-out decision and at the time of the fairness hearing. Moreover, although the ostensible purpose of the fund was to permit

class members to obtain medical and psychological consultations, claimants

were not required to demonstrate that they had received such counseling or

that they were in need of it.

The third type of claim, compensation for injuries resulting from fractures, was handled by means of a novel plan whose heritage lay in the Robins settlement. Class members (or their estates) had several options: They

could make a claim for immediate payment from Pfizer in accordance with

a formula established in the agreement; they could request binding arbitration from a three-member panel; or they could opt out of the alternative

compensation mechanisms and proceed with a traditional tort claim. The

formula for immediate compensation established compensation levels that

ranged between , and ,, for American claimants. Foreign

claimants were subject to reductions in this basic formula, depending on the

determination of a panel established for this purpose. Arbitration awards

were to be made for compensatory damages only and were to be based on

“historic levels of damages” for a person in the claimant’s circumstances.95

The traditional trial option, sometimes referred to as a “back-end opt out,”

permitted recovery of all damages, but was subject to nearly all of Pfizer’s

defenses. No limits on the number of opt outs or on Pfizer’s total obligations to fracture victims were imposed.

Pfizer also reserved the right to withdraw from the settlement in the

event that an excessive number of claimants excluded themselves from the

class during the initial “front-end” opt-out period.

Negotiations during and between the two rounds of fairness hearings led

to some significant changes in the terms of the settlement. The Amended

Supplement to Agreement of Compromise and Settlement, dated June ,

, included the following changes:

• Clarified that class members whose reoperation claims did not qualify

under panel guidelines retained the right to sue for emotional distress,

although such a suit destroyed the member’s chance to obtain further

benefits from the settlement. Qualifying members could also opt out

and file suit.

. Agreement of Compromise and Settlement, Bowling v. Pfizer, Inc., No. C---

¶ . (S.D. Ohio, Jan. , ) (copy on file with author).
 Mass Tort Settlement Class Actions

• Added a lump-sum payment of , for class members who were

entitled to undergo reoperation surgery, as well as , per week in

disability payments.

In the alternative, permitted claimants who died or were disabled during

reoperation surgery to make claims for immediate compensation or submit

to arbitration on the same terms as fracture victims. The right to file a traditional tort claim was also preserved.

After the conclusion of the first round of fairness hearings and Judge

Spiegel’s June  order, the parties again changed the settlement and entered into the Supplemented Agreement of Compromise and Settlement,

dated July , . The supplemented agreement made the following additional changes in the settlement:

• Clarified the guidelines for reoperation, so that only objective medical

factors and not subjective patient fears would be used to make reoperation eligibility decisions.

• Obligated Pfizer to continue to fund expenses for valve replacements

even after it had made its  million contribution to the Patient Benefit Fund.

• Added  million to the Consultation Fund to be divided equally

among spouses of heart valve recipients that claimed against the fund.

The settlement agreement provided that plaintiffs’ attorneys’ fees were to

come from either or both of the two funds created by the settlement. The

agreement further contemplated that the award would be based on a percentage of the value of these funds. No percentage was established in the

agreement; this was to be left to the court’s determination. No provisions

were made for attorneys’ fees when an attorney helped an individual class

member file for benefits from the funds. Pfizer agreed not to contest the

plaintiffs’ fee application.96

. Class counsel first applied for attorneys’ fees on October , , about seven weeks

after the settlement’s final approval. At that time they requested . million, or % of the

funds’ estimated value of  million. In , they increased that request to  million

(% of the funds’ estimated value), arguing that they had needed to, and in the future

would need to, expend additional time and labor. See Bowling v. Pfizer, Inc.,  F. Supp.

,  (S.D. Ohio), amended,  F. Supp.  (S.D. Ohio), aff’d ,  F.d  (th

Cir. ). In addition, numerous individual counsel, some of whom had objected to the

settlement, requested fees, as did two amici. Many of the fee requests were opposed by some

class members and by Public Citizen, one of the amici.

Judge Nangle, whom Judge Spiegel designated to decide the issue, generally eschewed the

use of hourly billing rates augmented by a lodestar calculation. Instead, he awarded plaintiffs’
Heart Valves: Bowling v. Pfizer, Inc. 

Shortly after final approval of the class settlement, in November , a

group of  opt-out plaintiffs settled their claims against Pfizer for  million. Individuals received between , and , for their emotional distress—considerably more than the amounts awarded to the participating class members. The opt-outs also retained the right to sue Pfizer

in the event of a valve fracture—just as the class members had received. On

the other hand, these claimants did not obtain the “insurance” provided by

the Patient Benefit Fund’s payment of reoperation expenses; the no-fault,

,-minimum alternative compensation for valve fractures; or the

right to arbitration. The group’s attorney had been active in heart valve litigation for some time.

Other settlements by Pfizer also ensued. The most significant was a settlement with  opt-out plaintiffs—also reportedly for amounts well in

excess of the amounts paid to class members for their emotional distress

claims.

Handling of Future Claimants

Bowling was a “futures only” class action; although every member of the

class had, to the extent that it was legally cognizable, an emotional distress

claim, none had suffered physical injury.97 Two subsets of these claimants

were entitled to receive future settlement benefits because of reoperation or

valve fracture. It was impossible to know which claimants fell into the two

subsets.

The settlement provided a measure of protection to these subsets

through its back-end opt-out features. Claimants who thought that they

were entitled to reoperation benefits but who were denied coverage retained

all tort remedies (in addition to the right to petition the court to obtain eligibility). Even those who were entitled to reoperation benefits had the right

to opt out of the settlement’s reoperation provisions and sue in tort. Similarly, the claimants that suffered valve fractures retained the right to pursue

a tort claim, and also received alternative compensation schemes. No limits

on the number of opt-outs, the ability to assert tort claims, or on the damages that could be recovered in tort were imposed.

attorneys % of the total settlement, which he valued at . million. Public Citizen received ,. in fees (calculated on an hourly basis); all other requests for fees were

disallowed.

. For the definition of “future plaintiffs,” see supra note .
 Mass Tort Settlement Class Actions

The one difficulty that future claimants encountered was that they were

forced to make a decision to opt out of the settlement on May , ,

before a number of clarifying and/or beneficial amendments to the settlement had been made. This fact presented a problem for those that did opt

out only to discover that the deal was sweeter than it had seemed to be

when the opt-out decision was made. To some extent, this problem has

been mitigated; Judge Spiegel has allowed numerous plaintiffs that originally opted out to re-enter the class.

Notice Procedure

The process of notifying the class about the terms of the settlement was less

extensive than the process used in the other mass torts under study. Notice

was accomplished by mailing (via first-class mail) a legal notice to all class

members known to Stanley Chesley, who was class counsel; by Mr.

Chesley’s provision of , notices to MedicAlert, which maintained a

registry of persons with the Bjork-Shiley heart valve; and by a campaign of

newspaper advertising in U.S. and foreign magazines and newspapers. Mr.

Chesley’s mailing went to , individuals; it is uncertain how many individuals received the notices supplied to MedicAlert. The total cost of the

notice campaign exceeded . million, with , paid from the settlement funds and the remainder by Pfizer.

No toll-free phone numbers for further information were listed on either

the summary notice or the legal notice. Mr. Chesley’s fax number and street

address were provided; his telephone number was not.

Approval and Review Process

Bowling required the court to examine the settlement both for procedural

impropriety (i.e., collusion) and for substantive insufficiency. The objectors’

concern about collusion was hardly fanciful. After years of vigorous litigation, Pfizer suddenly chose to settle with Mr. Chesley, a lawyer known for

his class-action settlements, but utterly inexperienced in heart-valve litigation. The case settled before the class counsel conducted any discovery on

the merits. A cloud of secrecy hung over the negotiation process. Objecting

attorneys dropped their objections, entered into fee-sharing arrangements

with class counsel (arrangements never made public), and were appointed

special counsel to the class. Pfizer agreed not to oppose class counsel’s request for fees. Finally, shortly after the class settlement concluded, other
Heart Valves: Bowling v. Pfizer, Inc. 

more experienced attorneys settled large inventories of cases for much

greater sums (albeit with a more limited package of benefits).

Once the court had denied discovery into the negotiation process, it became difficult for the objectors to prove collusion as a factual matter. The

court indicated that “the proof [of a settlement’s fairness] is in the eating”98—in other words, a substantively fair and reasonable settlement disproves the existence of collusion. Since the court regarded the settlement as

fair, it found no collusion to exist.

In order to determine the substantive fairness of the settlement, the court

accepted the standard that a class settlement needs to be “fair, adequate, and

reasonable.”99 To give this standard more flesh, the court relied on two presumptions and four factors. The presumptions canceled each other out: the

first was that a settlement is presumed fair when it “is recommended by

class counsel after arms-length negotiation,”100 and the other is that a settlement reached prior to class certification requires “a higher level of scrutiny.”101 The four factors were () “the strength of the plaintiff’s case” in

comparison to “the amount and form of relief offered by the settlement”;

() “the presence of collusion”; () “any objections raised by class members”;

and () “the amount and nature of discovery.” The court regarded the first

factor as “the key factor.”102

Among the objectors’ arguments was the contention that the class should

not have been certified. Their first argument—that settlement class actions

are always inappropriate—was rejected by the court. Their second argument—that the requisites of Rule  were not established—was also rejected. In the retrospective light of Amchem, the court resolved the first argument correctly,103 and the second argument incorrectly.

With respect to the second argument, the court performed a detailed

analysis of the Rule (a) requirements of numerosity, commonality, typicality, and adequacy of both class representatives and counsel. When discussing commonality and typicality, it focused on the plaintiffs’ pre-

. Bowling,  F.R.D. at ; see id. at  (“the taste is in the eating”).

. See id.,  F.R.D. at , .

. Id. at . “Arms-length negotiation” implies a lack of collusion. Therefore, this presumption further entwines the issues of substantive fairness and collusion, and should have

made an inquiry into the collusion issue even more relevant to the decision whether to approve the settlement.

. Id.

. Id.

. See Amchem,  S. Ct. at .
 Mass Tort Settlement Class Actions

settlement legal claims.104 When discussing adequacy of the plaintiffs as representatives, however, the court focused on the plaintiffs’ common interests

in the settlement—particularly their interests in achieving compensation for

distress, fractures, and reoperations and in having research and development

conducted.105 Although the former analysis is consistent with Amchem, the

latter appears not to be.106

The court’s analysis of the Rule (b)() requirements extended for only

one paragraph. The opinion asserted, without further explication, that

“common questions as to the Defendant’s actions predominate”; and it

then held that the equal treatment of class members with low transaction

costs made the class action fair.107 Again, this analysis seems inconsistent

with the Court’s later decision in Amchem.

108

Modifications in Traditional Adversarial Roles

Lawyers in our legal system are required to act with a high degree of loyalty

to their clients’ interests and to avoid conflicts of interest. Complex litigation, and class actions in particular, often strain traditional understandings

of these ethical responsibilities.

The major allegation of a conflict of interest revolved around Mr.

Chesley’s alleged collusion with Pfizer. Several other conflicts of interests,

however, appear to have been eliminated by the terms of the settlement. For

instance, since there were ultimately no caps on Pfizer’s agreement to pay

for reoperation claims, early “explantees” were not opposed to late “explantees.” The same was true of early and late fracture claimants, both of whom

were guaranteed that Pfizer would pay the formula amount without limitations on the number of eligible claimants. Likewise, spouses received separate awards, thus preventing a conflict of interest between the married and

unmarried.

Some conflicts remained. Because of inflation, early reoperation or fracture claimants received more money (in real dollars) than later claimants.

Rich fracture claimants would have been hampered by the  million cap;

. Bowling,  F.R.D. at –.

. Id. at .

. See Amchem,  S. Ct. at –.

. See Bowling,  F.R.D. at .

. See Amchem,  S. Ct. at – (“If a common interest in a fair compromise

could satisfy the predominance requirement of Rule (b)(), that vital prescription would be

stripped of any meaning in the settlement context.”).
Heart Valves: Bowling v. Pfizer, Inc. 

poor claimants were not handicapped. The -degree valve recipients presented a different litigation profile than the -degree valve recipients. Nonfracture claimants to whom California law applied were in a better legal

position than either those whose cases were to be decided under the laws of

states that had already rejected the fraud theory or those whose cases were to

be decided under the laws of states that had not yet decided this issue. Simultaneous representation of all of these different interests inevitably generated certain tensions and conflicts. These conflicts were reduced by the

back-end arbitration and opt-out provisions, since claimants had opportunities to achieve higher compensation if they chose to accept the opportunity’s risk.109 Nor is it clear that individual class members were in fact

harmed by the simultaneous representation; although it is true that some

claimants benefited significantly (such as those in states that had rejected a

fraud theory), other claimants (such as those in California) may still have

received a larger net recovery under the settlement than they would have

received in individual litigation.

Irreducible conflicts of interest may have existed, however, with regard to

certain aspects of the settlement. Those in immediate need of explantation

were unlikely to benefit from the research and development fund, and

might well have preferred higher payments for explantation costs. Moreover, although there was, as the court said, “a certain egalitarian fairness” in

awarding each member an identical amount from the Consultation Fund,110

different class members undoubtedly had different emotional reactions to,

and different levels of appropriate compensation for, the alleged defect in

the Bjork-Shiley valve. No special representation was provided to these

groups.

Mr. Chesley did not represent any clients who were already suffering

from implant-related injuries, so there was no issue of his divided loyalty

between presently injured and future claimants.111

. Early and late claimants could also have been in a conflict situation if the combined

assets of Shiley and Pfizer might have been insufficient to fund later claims. Objectors did

not seriously contend that insolvency was likely.

. See Bowling,  F.R.D. at .

. Some of the special class counsel ultimately brought into the litigation may have had

such issues to address.
 Mass Tort Settlement Class Actions

Assessment

Bowling demonstrated the power of collective action; the class received 

million in benefits for an emotional distress theory on which no person had

been successful at trial. The settlement itself had strengths and weaknesses.

The first strength, which reduced conflict of interest concerns and made it

difficult to argue that the settlement was unfair, was the back-end opt-out

provision. This provision empowered class members to make the decision

about using tort or alternative payment schemes at the point when they

possessed accurate information about their condition and about the available alternatives. Unlike other settlements we shall study, heart valve claimants were not forced to make opt-out decisions at a time when they were

healthy and thus unable to assess accurately their needs for compensation,

their preference for risk, and the benefits and drawbacks of tort as opposed

to alternative compensation schemes.

A second strength was the court’s June , , order expressing concerns about the settlement. Since judges cannot usually modify the terms of

a class settlement,112 this vehicle gave the court the chance to engage in a

dialogue about the settlement’s fairness without the court having to approve

or disapprove the settlement. It also left in the parties’ hands the decision

about whether and how to restructure the settlement. If such a method is to

be generally used, however, care must be taken (as the court did in this case)

to allow opt-out plaintiffs to re-enter the class after renegotiation makes the

deal sweeter.

The settlement also had weaknesses. The first was the limitation on discovery before, as well as the nonadversarial method of presentation during,

the fairness hearing. Allegations of collusion and inadequacy of compensation hung over the settlement; in order to assure class members and the

public generally about the fairness of the outcome, a fuller opportunity to

explore these issues might profitably have been permitted. A second concern

was the notice procedure, which relied entirely on individual notice to

known claimants and advertisements in large-city newspapers. This process

probably did not reach the entire population of potential claimants. Indeed,

there appears to be a correlation between the , claimants who sought

. At present, courts possess very limited powers to restructure a settlement. See Jack B.

Weinstein & Karin S. Schwartz, Notes from the Cave: Some Problems of Judges in Dealing with

Class Action Settlements,  F.R.D.  (); In re Joint E. and S. Dist. Asbestos Litig., 

F.d  (d Cir. ), modified,  F.d  (d Cir. ).
Heart Valves: Bowling v. Pfizer, Inc. 

compensation from the fund113 and the ,–, individual notices

mailed out. Given that approximately , class members were alive

when the period for filing claims ended, that the parties anticipated ,

claims, and that , to , was available virtually for the asking, the

low number of actual claimants suggests that the notice program may not

have been entirely effective. A third weakness was the lack of subclasses that

prevented the full airing of differing interests.

A difficult issue is the distribution of payments from the Consultation

Fund. As the court noted, there was an egalitarian fairness to such an equal

division, and this division also dramatically reduced transaction costs of implementation. But the plan made no pretense of awarding compensation

based on injuries suffered and contributed to a sense that class counsel was

representing a hypothetical “average class member” rather than representing

the interests of real individuals. But even this egalitarian sense in the distribution of damages was dashed by Pfizer’s subsequent settlements with opt

outs for six to fifty times as much money. The disparate outcomes for class

members and opt outs are, in retrospect, the most haunting feature of this

litigation.

. Of these, , were disallowed. See Bowling,  F. Supp. at .


Asbestos Exposure: Amchem Products,

Inc. v. Windsor [Georgine] 114

Introduction115

The nature and history of the asbestos litigation is well known.116 Asbestos

litigation followed the classic mass tort pattern to maturity. Manufacturers

won the early cases. Plaintiffs adjusted their theories, obtained more and

more discovery, and achieved breakthrough verdicts. Defendants fine-tuned

their defenses, and plaintiffs fine-tuned their attacks. By the early s, the

script for an asbestos trial had essentially been written.

At the same time, the absolute numbers of asbestos cases were rising

dramatically. The dockets of state and federal courts whose districts encompassed shipbuilding and other asbestos-using industries became choked with

filings. Many cases had at least twenty defendants and created significant

case-management problems. Transaction costs to resolve the cases were

high.

In , in response to a request from eight federal judges, the Judicial

Panel on Multidistrict Litigation agreed to consolidate all federal cases before Judge Charles Weiner of the Eastern District of Pennsylvania. Judge

Weiner appointed Gene Locks and Ronald Motley as lead co-counsel of the

Plaintiffs’ Steering Committee.

After this pretrial consolidation was effected, Messrs. Locks and Motley,

along with Mr. Motley’s partner Joseph Rice, simultaneously began to ne-

. In the trial court and court of appeals, the Amchem case was known first as Carlough

and then as Georgine. See supra note .

. With the exception of clarifying footnotes and citations for direct quotations, no

footnotes or other citations to record sources will be used in this case study. Persons interested in the sources for the factual assertions made in this case study should refer to Tidmarsh, supra note , at –.

. See, e.g., Paul Brodeur, Outrageous Misconduct (); Report of the Judicial Conference Ad Hoc Committee on Asbestos Litigation ().
 Mass Tort Settlement Class Actions

gotiate a two-prong settlement with the Center for Claims Resolution

(“CCR”), a group of twenty like-minded asbestos manufacturers facing

, pending suits nationwide. In the first prong, the CCR agreed to

settle for  million all of the presently filed claims (the “inventory”

claims) being handled by Messrs. Locks, Motley, and Rice and their affiliated counsel.117 These settlements were concluded in the summer and fall of

, and included some claims for pleural changes and some claims that

had not yet been filed. In the second prong, the CCR agreed to settle the

claims of persons who had not yet filed suit on an opt-out class action basis.

The estimated value of this settlement during the first ten years of its existence approached or exceeded . billion, plus an estimated  million in

costs. This settlement was concluded on January , .

History of the Lawsuit

On the same day, the parties filed a lawsuit, Carlough v. Amchem Products,

Inc., to obtain certification of a Rule (b)() settlement class and approval

of the settlement. Simultaneously with the filing of the complaint, the parties moved for conditional certification of the class for the purpose of obtaining approval of the settlement and the appointment of a special master.

The class itself, which the Third Circuit described as “a hodgepodge of factually as well as legally different plaintiffs,”118 included all persons in the

United States (or their legal representatives) who () had been occupationally exposed to defendants’ asbestos products and () had not filed suit

against the defendants before January , . Also included were spouses

and other household members who () were themselves exposed to asbestos

by virtue of their spouses’ occupational exposure and () had not filed suit

before January , ; as well as unexposed spouses, parents, and children

who () had derivative claims resulting from a class member’s exposure and

() had not filed suit before January , . It was not a requirement of

class membership that the member be suffering from any present injury;

both presently injured and presently healthy persons were included. No

subclasses were created.

The plaintiffs in the case were six individuals who had been exposed to

the CCR defendants’ asbestos, three representatives of the estates of persons

. As three of the leading asbestos lawyers in the country, Messrs. Locks, Motley, and

Rice represented or were affiliated on more than , cases nationwide. Georgine v. Amchem Prods., Inc.,  F.R.D. ,  (E.D. Pa. ).

. Georgine,  F.d at .
Asbestos Exposure: Amchem Products, Inc. v. Windsor [Georgine] 

with such exposure, and three spouses. None of the representatives had yet

filed suit against the CCR defendants. Of the nine non-spouse plaintiffs,

four of them (or their decedents) had mesothelioma, one had asymptomatic

pleural thickening, and four had no symptoms. No asbestosis, lung cancer,

or other cancers were represented in the group. No subclasses were created.

The size of the class was unknown; it certainly ran into the tens of thousands, and may have run into the millions of persons.

On January , , Judge Weiner conditionally certified the class under Rule (b)(), appointed Messrs. Locks, Motley, and Rice as class counsel, and appointed Professor Stephen Burbank as special master. At the

same time, Judge Weiner assigned to Judge Lowell Reed of the Eastern District of Pennsylvania the responsibility of conducting the fairness hearings

and determining whether to approve the settlement.119 One of Judge Reed’s

first tasks was to head off an indirect challenge to the settlement by dissatisfied class members who filed a class action in West Virginia state court. In a

decision subsequently affirmed by the Third Circuit, Judge Reed issued on

April , , a temporary restraining order, later converted into a preliminary injunction, that prevented class members from maintaining or filing

related actions while Judge Reed considered the settlement.120

Judge Reed then turned to consideration of the settlement. He divided

the task into two tracks: a track in which he considered jurisdictional challenges to the settlement and a track in which he considered class certification and settlement approval issues. In the jurisdictional track, which he

completed first, Judge Reed rejected all jurisdictional barriers to the settlement.121 In the certification and approval track, Judge Reed subdivided this

task into several stages. First, he conducted a preliminary inquiry into the

fairness of the settlement.122 Relying on proffers, submissions, and oral argument from the settling parties, the objectors, and the amici, Judge Reed

preliminarily approved the settlement on October , . At the same

time, Judge Reed approved, with some modification, the parties’ plan for

class notice.

. Georgine,  F.R.D. at . Judge Weiner retained responsibilities with respect to

other aspects of the case.

. See Carlough v. Amchem Prods., Inc.,  F.d  (d Cir. ).

. See Carlough v. Amchem Prods., Inc.,  F. Supp.  (E.D. Pa. ).

. See Carlough v. Amchem Prods., Inc.,  F.R.D.  (E.D. Pa. ). Judge Reed

cited the Manual for Complex Litigation, Second § . () in deciding to hold the preliminary hearing. See Carlough,  F.R.D. at .
 Mass Tort Settlement Class Actions

During this time, the parties, objectors, and amici began preparations for

the fairness hearing. Judge Reed accorded parties and others broad discovery

rights for the hearing. In a form of mandatory disclosure, Judge Reed first

ordered the settling parties to provide objectors with certain information

relevant to the settlement. Objectors then were entitled to use traditional

means of discovery, such as interrogatories, requests for production, and

depositions. But Judge Reed refused to permit depositions of counsel involved in the settlement negotiations; instead, he allowed objectors to depose the named plaintiffs and Michael Rooney, the CCR’s chief operating

officer, in order to discover why the parties had settled. At the same time,

Special Master Burbank was conducting an independent factual inquiry

into one aspect of the claim that class counsel had been “bought off” by the

CCR. This limited inquiry explored whether class counsel received more for

their inventory settlements than they had received in prior settlements with

the CCR defendants.123

Commencing on February , , the fairness hearing lasted eighteen

days, spread out over a period of five weeks. A total of twenty-nine witnesses testified; each was subject to direct and cross-examination. Among

the witnesses were experts in medicine, finance, and legal ethics. Objectors

and amici were given full rights of participation and were given the opportunity to submit post-hearing briefs. A day-long final argument occurred on

May , .

On August , , Judge Reed certified the class action and approved

the settlement.124 On September , , he preliminarily enjoined class

members who had not opted out from filing suits against the CCR defendants.125 This injunction was the vehicle for the objectors’ appeal to the

Third Circuit.

Some additional work still remained in the district court. In the most

significant ruling, on February , , Judge Reed voided the exclusion

requests of the , persons who had opted out of the settlement during

the first opt-out period, and ordered new notices and a new opt-out period

for these claimants. The reason was that some objecting attorneys had sent

. Professor Burbank found that there were some disparities in settlement averages between the prior settlements and the inventory settlements that he examined, although those

disparities tended to be small and also tended in some cases to be unfavorable to the inventory settlements. Georgine,  F.R.D. at –.

. Id. at .

. Georgine v. Amchem Prods., Inc.,  F. Supp.  (E.D. Pa.  ). Approximately

, class members had filed suit. Id. at .
Asbestos Exposure: Amchem Products, Inc. v. Windsor [Georgine] 

to class members misleading communications that might have affected their

opt-out decision.126

The main battle, however, had shifted to the court of appeals. On May

, , the Third Circuit vacated the order of the district court certifying

the class, vacated a subsequent preliminary injunction against suits by class

members, and remanded the case with directions to decertify the class.127

On June , , the Supreme Court affirmed the Third Circuit.128

Settlement Terms

The settlement was a complex agreement designed to compensate certain

types of asbestos injuries in a predictable fashion. It began by limiting compensation for asbestos exposure to certain types of injuries: mesothelioma;

cancers of the lung, larynx, esophagus, stomach, colon, and rectum; and the

non-malignant conditions of asbestosis and symptomatic bilateral pleural

thickening. It then established specific eligibility criteria, including diagnostic criteria, latency period between first exposure and injury, and necessary

duration of exposure for various occupations. As a general matter, class

members who did not meet the eligibility criteria were unable to receive

compensation.129 For example, asymptomatic plaintiffs, as well as plaintiffs

with pleural thickening that was not bilateral and symptomatic, were unable

to make any claims for compensation;130 they were required to defer their

. Georgine v. Amchem Prods., Inc.,  F.R.D.  (E.D. Pa. ). The second optout notice was sent only to those who had opted out in the original opt-out period; those

that had originally remained in the class were not allowed to exclude themselves during the

second period. Id. After this opt-out period, , class members ultimately chose to opt

out. See Georgine v. Amchem Prods., Inc.,  WL  (E.D. Pa.).

. Georgine,  F.d .

. Amchem,  S. Ct. .

. There was one significant exception to this statement: Class members could be selected for compensation as an “Exceptional Medical Claim.” See infra note  and accompanying text.

. The plaintiffs and the CCR conceded that the eligibility criteria for these plaintiffs

were “more stringent than those used by some courts.” Georgine,  F.R.D. at . But the

court found that the settlement did cover “substantially all persons” with “asbestos-related

conditions involving demonstrable impairment,” id. at , and that non-impaired claimants

received benefits of “significant value” from the settlement (such as defendants’ waiver of

liability defenses and statutes of limitation if an impairment ultimately occurred), id. at .

The court did not make findings regarding either the number of impaired class members or

the number of non-impaired class members with valid state law claims who were denied

compensation by the settlement.
 Mass Tort Settlement Class Actions

claims until an injury compensable under the settlement manifested itself.

Similarly, lung cancer victims who did not meet the eligibility criteria, but

who might nonetheless have received compensation in a tort suit, received

no compensation.131

The second critical concept of the settlement was that certain minimum,

maximum, and average compensation levels were established. For a mesothelioma claim, for instance, a minimum payment of , and a maximum payment of , were established for qualifying claims.132 The

decision about the actual settlement offer to an individual plaintiff remained within the CCR’s discretion, but this discretion was to be informed

by two variables. First, the CCR was to take into account such factors as

age, dependents, job history, likely forum for the lawsuit, historic settlement

values and jury verdicts in comparable cases, and extent of injury. The second variable was an “average” settlement range. At the end of each sixmonth period, the total amount of the settlements in a particular category

of injury, when divided by the total number of cases, was to have fallen

within a specified settlement range. For mesothelioma, for example, the

average settlement value was , to ,; while the CCR could offer as much as , or as little as , in a given case, the aggregate

range provided some ultimate upper limit on the CCR’s settlement obligations and a lower-end assurance of more than minimal compensation for

plaintiffs.133

. One of the objectors’ lawyers has estimated that as many as % of all lung cancers

compensable in the tort system were excluded from the settlement. Memorandum from

Brian Wolfman to Tom Willging  (Aug. , ) (copy on file with author). This issue was

hotly contested at the fairness hearings. The court ultimately rejected the views of the objectors’ experts that significant numbers of these claims were excluded. Georgine,  F.R.D. at

, . Instead, the court credited the views of the settling parties’ experts that the settlement “will fairly include substantially all persons who have asbestos-related malignancies.”

Id. at . The court also noted that the “Exceptional Medical Claim” process, see infra note

 and accompanying text, could accommodate some of the remaining lung cancers excluded from the settlement. Id. As a result, the court found that “few if any persons with

lung cancer . . . would be denied compensation under the Stipulation.” Georgine,  F.R.D.

at .

. For lung cancer, the minimum and maximum were , and ,; for other

cancer, , and , ; and for non-malignant conditions, , and ,. For

specially designated “extraordinary claims,” the compensation amounts were higher. See infra

note  and accompanying text.

. The range for lung cancer was , to ,; for other cancer , to

,; and for non-malignant conditions, , to ,. The figures were capable of

being adjusted upwards after ten years, although not by more than %. Aside from the
Asbestos Exposure: Amchem Products, Inc. v. Windsor [Georgine] 

Aside from capping recoveries (both individually and in the aggregate),

the settlement established “case flow maximums” which obligated the CCR

defendants to pay only a certain number of claims in each category in each

year. In the first year, for instance, the CCR agreed to pay no more than

 mesothelioma claims,  lung cancer claims,  other cancer claims,

and , non-malignant claims. If more than  mesothelioma claims

were presented in the first year, the excess claims would take first priority in

the year following.

The settlement also gave three other payment options. First, if a person

wished an expedited payment, he or she could opt for the minimum compensation for that category. Second, a person could seek “Extraordinary

Claim Treatment,” for which payouts were somewhat higher, although

there were limitations on the numbers of claimants that could use this option.134 Third, a person unhappy with a CCR offer retained a right to file

suit or seek binding arbitration. Unlike the opt-out right in Bowling, however, this back-end opt out was limited in three ways. First, those who were

deemed ineligible under the settlement’s criteria were unable to file suit;

their claims were simply barred. Second, only % of the mesotheliomas, %

of the lung cancers, % of the other cancers, and .% of the non-malignant

conditions could opt out in a given year. If a claimant failed to succeed in

opting out in one year, he or she went into a queue, and was able to opt out

in some following year.135 Third, the back-end opt-out right was also

hedged in by a requirement that parties first go through a settlement conference before filing suit or seeking arbitration, and by a requirement that

no fear of cancer, risk of cancer, or punitive damages could be claimed.

Conversely, however, the back-end opt out was more generous than the

CCR’s agreement to use certain factors in making settlement awards and the need to account

for claimants that accepted the minimal possible award, nothing obliged the CCR to offer

more than the minimal average settlement to any individual claimant.

. Maximum amounts were , for mesothelioma claims, , for lung cancer claims, , for other cancer claims, and , for non-malignant conditions. No

more than % of the mesothelioma cases, % of the lung cancer cases, % of the other cancer

cases, and % of the non-malignant cases were eligible for treatment as “Extraordinary Medical Claims.”

. For instance, if , non-malignant claims were filed in , only  opt outs

were allowed. If  persons chose the opt-out route,  could file suit in ,  more in

 (assuming , claims were also filed in ), and  more in  (assuming ,

claims were also filed in ). The first  claimant wishing to opt out could not do so

until .
 Mass Tort Settlement Class Actions

right in Bowling in one regard: The CCR defendants agreed to waive all

defenses or arguments other than causation and damages at an opt-out trial.

The settlement also established dispute resolution mechanisms if the

CCR and the claimant disagreed about the claimant’s eligibility under the

diagnostic, exposure, frequency, or latency criteria. A panel was also created

to determine “Exceptional Medical Claims.” Under this procedure, claimants whose claims either could not meet the ordinary eligibility criteria or

were rejected for payment under these criteria could apply for treatment as

an exceptional medical claim. Such claims were to be granted when the

panel was convinced that a claimant had “an asbestos-related condition that

is substantially comparable to that of [a claimant] who would satisfy the

[eligibility] requirements.”136 There were limitations on the total number of

exceptional claims that could be deemed eligible each year, and these claims

counted toward the case-flow maximums established for each year.137

The CCR defendants also collectively reserved the right to withdraw at

the outset of the settlement in the event that too many individuals opted

out. After the first ten years of the settlement’s operation, each CCR defendant could choose either to withdraw from the settlement or to remain in it

on a permanent basis. Plaintiffs had no rights of withdrawal.

Finally, the settlement provided that the CCR would pay the class counsel’s attorneys’ fees. The court was to approve the amount; no formula for

compensation was agreed on, nor did the CCR waive its right to object to

counsels’ fee application. The payment to class counsel was not to be taken

from claimants’ awards, but was to be paid in addition to such awards. Individual attorneys representing claimants before the CCR were also entitled

to receive a fee for their work. This fee, however, was paid from the claimants’ recovery, not from the CCR. A maximum contingency fee of % was

established for such representations.138

. Stipulation of Settlement and Amendment to Stipulation, Carlough v. Amchem

Prods., Inc., No. -CV- at  (E.D. Pa., Sept. , ) (copy on file with author).

. For instance, the number of exceptional claims that could be paid at the rate of

mesothelioma claims was %. The comparable limitations for other disease processes were

% of the compensable lung cancers, % of the other cancers, and % of the nonmalignant conditions.

. No award of attorney’s fees was ever made by Judge Reed or Judge Weiner, although

the court did authorize the payment of certain expenses by class counsel.
Asbestos Exposure: Amchem Products, Inc. v. Windsor [Georgine] 

Handling of Future Claimants

Georgine combined in one class action both plaintiffs with present claims

and “future plaintiffs.”139 Although a special master was appointed to determine whether the class claimants were being treated differently than prior

inventory claimants of class counsel, no special representation of the interests of future claimants was provided during the settlement process.140

Notice Procedure

The notice plan adopted in Georgine was extensive. Individual first-class

notice was mailed to more than , known class members (or their attorneys) who had filed suit after January , . A substituted notice campaign was also conducted. A full-page summary notice was placed in Parade

magazine and a half-page notice in  newspapers in  media markets; a

second round of advertising occurred in  newspapers in the  media

markets in areas that had high occupational asbestos use. In addition, courtapproved “clip art” was supplied to  unions and to trade organizations; 

of these unions then included the notice in publications sent by mail to

about  million homes. Nine of these unions also mailed individual notices

to , members. Thirty-second television ads were also placed in 

media markets covering % of all households with TVs. Public service

announcements and press releases were prepared. A toll-free phone number

was established, a question-and-answer book was prepared, and a more

complete -page notice (including a -page appendix) was developed. As

a result of these efforts, an additional , notice packets (or the full

Stipulation of Settlement) were mailed to requesting persons.

The total cost of the notice program slightly exceeded  million. The

costs of the notice program were borne by the CCR defendants.

. For the definition of “future plaintiffs,” see supra note .

. The settlement did provide certain protections for future plaintiffs. First, future

claimants could bring claims based on conditions that developed subsequent to an earlier

compensable injury. Second, the parties agreed in an amendment to the settlement to permit

the AFL-CIO to participate in annual audits of the CCR’s implementation of the settlement.

On Judge Reed’s recommendation, Judge Weiner also appointed David Shrager as special

class counsel to represent the class’s interests in the annual audits.
 Mass Tort Settlement Class Actions

More than , persons requested the notice materials. The court

estimated that about . million class members received notice through

first-class mail or through other individually delivered notice.141

Approval and Review Process

In advance of the fairness hearing, the court accorded broad discovery rights

to objectors. In addition to these procedures, the court appointed a special

master who conducted an inquiry into aspects of the settlement’s fairness.

Trial-like procedures, with rights of direct and cross-examination, were used

at the fairness hearing.

The Georgine case raised serious and sustained challenges on the grounds

of collusion and substantive fairness. The collusion claim in Georgine was

rather different than the one in Bowling : In Georgine, the objectors claimed

that counsel had sold out the class members in return for sweetheart deals

on the settlement of their “inventory” claims. The court broke the analysis

into two parts: a conflict of interest analysis and a collusion analysis. In the

conflict of interest category, the court placed class counsel’s contemporaneous efforts to settle present and future claims, as well as class counsel’s purported agreement to not represent (or at least to not give advice to sue to)

claimants with no present injury. In the collusion category, the court placed

the possibility that class counsel had received more for their “inventory”

clients than for the class members. The court ultimately found neither a

conflict of interest nor collusion, and the Third Circuit did not disturb the

district court’s findings of fact on these issues.

In order to determine the substantive fairness of the settlement, the court

used the standard benchmark: Was the settlement “fair, adequate and reasonable?”142 The court also broke the analysis of this standard into two

parts: first, an analysis of the major provision of the settlement agreement,

in which the court considered objections and made individual findings of

the fairness of each of the terms; and second, an analysis of the overall fairness of the settlement. In the second inquiry, the court was guided by a

group of factors: () the strength of the claims against the benefits to class

members; () the stage of proceedings and the amount of discovery—in

other words, the case’s maturity; () the reaction of the class; and () how

. The number may be inflated, since some recipients of the notice were probably not

class members and others may have received double notice.

. Georgine,  F.R.D. at .
Asbestos Exposure: Amchem Products, Inc. v. Windsor [Georgine] 

and by whom the settlement was negotiated.143 The first factor was stated to

be primary in the court’s analysis.144

The retrospective lens of the Third Circuit and Supreme Court opinions

have identified the court’s legal errors in certifying the settlement class. Of

particular interest are the court’s conclusions that () the Rule  requirements “are often more readily satisfied in the settlement context because the

issues for resolution by the court are more limited than in the litigation context”;145 and () Rule (b)() was satisfied when there existed a common

interest in prompt and fair compensation and a fair overall settlement.146

Although a piece of the first conclusion was validated in Amchem, neither

proposition survives Amchem unscathed.147

Modifications in Traditional Adversarial Roles

Georgine presented class counsel with significant ethical issues. Many of the

ethical issues concerning class counsel have already been explored. One set

of ethical concerns, however, has only been touched on lightly: the simultaneous representation of potentially conflicting sets of future claimants. The

court analyzed this issue not in terms of an attorney’s ethical obligation, but

rather in terms of the adequacy of the named plaintiffs as representatives of

the class. The Third Circuit and the Supreme Court did the same. The ultimate conclusion of the latter two courts was that the interests of various

segments of the class (for instance, near and far future claimants, presently

injured and presently uninjured claimants, direct claimants and derivative

claimants) could not be represented in a single class. This suggests that, under traditional notions of legal ethics, class counsel had irreconcilable conflicts of interest when they attempted to represent all these interests.

There also existed two sets of potential conflicts not explored by these

courts: the difference between cancer victims who met the restrictive criteria

for compensation and those who did not, and the difference between those

asymptomatic or mildly impaired plaintiffs who would have fared better

under the tort system and those asymptomatic or mildly impaired claimants

who would have fared better under the settlement. Although the district

court addressed the issue of whether the settlement provisions were substan-

. Id. at –.

. Id. at .

. Id. at .

. Id. at . For this proposition, the court cited Bowling,  F.R.D. .

. See supra notes – and accompanying text.
 Mass Tort Settlement Class Actions

tively fair to these groups, it did not address the distinct question of

whether one set of attorneys could ethically represent both groups. As Amchem cautions, however, substantive fairness and separate representation for

distinct interests are two different questions.

Assessment

The strengths of this case are the procedural protections with which the

fairness hearing was conducted and the thoroughness of the district court’s

analysis of the issues it faced. Unlike Bowling, there is no sense that important questions may have been left undiscovered. The process led to a full

airing of relevant issues and a well-reasoned (albeit ultimately reversed)

opinion.

There were weaknesses as well. The lack of separate classes or subclasses

to account for different interests within the class, as well as class counsel’s

simultaneous representation of inventory claimants and class members, cast

a pall over the settlement, and ultimately brought about its demise. The

plan for notice was good, but with a class as sprawling as Georgine, notice

undoubtedly escaped the attention of significant numbers of class members.

The CCR-controlled compensation mechanism—as opposed to a trust

or a court-annexed settlement system—was an interesting concept that required various checks, such as minimal settlement amounts and average

settlement ranges. It was, however, the existence of these checks, as well as

the differences they created between inventory and class claims, that generated some of the intransigent problems in the case. Moreover, the limitations on back-end opt outs deprived most future claimants of the power to

make litigation decisions at the time when they possessed the best information, and as a practical matter forced most eligible claimants to use the settlement system. Whether such a system might have worked—or whether it

would have created unfair advantages for early-in-the-year or late-in-theyear filings—is an interesting, and now not to be resolved, issue.


Asbestos Exposure Redux: Ahearn

v. Fibreboard Corp.

Introduction148

One of the asbestos defendants that was not part of the Center for Claims

Resolution was Fibreboard Corporation. Fibreboard had not been a large

player in the asbestos industry, nor was it a particularly wealthy one. As

other, larger manufacturers went into bankruptcy, however, joint and several liability made it an increasingly attractive target. One of the reasons it

was so attractive was because, during the s, Fibreboard had signed two

insurance contracts that arguably gave it complete insurance coverage for all

claims of pre- asbestos exposure. The assets of the two insurance companies, Continental Casualty and Pacific Indemnity, were considerable—if

they could be tapped by asbestos victims. Fibreboard contended that the

insurers’ policies required Continental to defend and pay, in unlimited aggregate amounts,149 all claims in which an asbestos victim had been exposed

to Fibreboard asbestos prior to March , ; Pacific had a similar obligation for all exposures prior to May , . At a massive consolidated trial

that lasted four years, Fibreboard prevailed on most issues. Continental and

Pacific immediately appealed.

In , during the pendency of the appeal, Fibreboard entered into a

complete settlement of its dispute with Pacific, in return for which Pacific

agreed to pay Fibreboard somewhere between  million and  million

(depending on the outcome of the appeal). Fibreboard also sought to put

pressure on Continental by settling cases with asbestos plaintiffs for a nego-

. With the exception of clarifying footnotes and citations for direct quotations, no

footnotes or other citations to record sources will be used in this case study. Persons interested in the sources for the factual assertions made in this case study should refer to Tidmarsh, supra note , at –.

. The policies did have , per person and  million per occurrence limits.
 Mass Tort Settlement Class Actions

tiated amount. In some cases, Fibreboard paid a percentage of the amount

in up-front cash, and then entered a “Structured Settlement Program” under which payment of the remainder was deferred until the conclusion of

the California coverage case. In other cases Fibreboard put no cash down

and assigned to the settling plaintiffs its rights against Continental. Since

plaintiffs were accepting a degree of risk in either of these settlements, they

often received higher values in settlement than was typical of comparable

asbestos settlements. Therefore, Continental was facing the prospect of

paying off some rather pricey settlements if these “assignment-settlements”

were valid and if it lost the California coverage case. The first of these conditions came to pass when a California state court ruled that Fibreboard’s

assignments did not breach its contract with Continental.

At the same time, Fibreboard, like the CCR, was trying to find a global

solution to its asbestos crisis. Like the CCR, in  it sought out several

plaintiffs’ lawyers who had figured prominently in Fibreboard cases, including Joseph Rice150 and Joseph Cox, from the Ness, Motley firm in

South Carolina; Steven Kazan, from a firm in California; and Harry Wartnick, from a different firm in California. The original idea was to reach a

global settlement value for all present and future claims and then to assign

to the lawyers the right to proceed against Continental. Eventually, in

spring , the negotiations broke off.

Soon afterwards, Fibreboard representatives approached Messrs. Rice

and Cox to negotiate a settlement of present claims with their firm alone.

They achieved a settlement (called the “Initial Ness Motley Agreement”151)

of , claims in December . Judge Robert Parker then requested

Judge Patrick Higginbotham of the Fifth Circuit to act as settlement facilitator. Sometimes with Judge Higginbotham’s intervention, but more frequently in private discussions, the next few months saw a dizzying array of

agreements (often interspersed with dead-ends):

• On April , , Continental and Fibreboard agreed to work together

toward a global solution. Continental also agreed to work with Fibre-

. Mr. Rice was also one of the class counsel in Georgine.

. This Initial Ness Motley Agreement was later superceded by the “Substitute Ness

Motley Agreement.” See infra note  and accompanying text. After conclusion of the Initial

Ness Motley Agreement, Fibreboard had agreed to  million in assignment-settlements

and also owed more than . billion in deferred payments under its structured settlement

program. Asbestos Litig.,  F.d at . These liabilities far exceeded its assets of approximately  million.
Asbestos Exposure Redux: Ahearn v. Fibreboard Corp. 

board to renegotiate and pay the structured settlement and assignment

claims Fibreboard had been settling at a premium.152

• On August , Fibreboard and Continental modified the Initial Ness

Motley Agreement, and agreed to settle , pending cases with the

Ness, Motley firm. The new agreement was called the “Substitute Ness

Motley Agreement.” Under this agreement, Continental paid “a

higher-than-average value per claim with one-half due at closing and

the remainder contingent on the outcome of the coverage case or on

the existence of a settlement.”153 Ness, Motley also agreed to recommend the settlement of all future claims on the same terms as the Substitute Ness Motley Agreement.

• On August , Judge Parker held a hearing on the fairness of the Substitute Ness Motley Agreement and found it fair and reasonable.

• Immediately thereafter, and at Judge Higginbotham’s suggestion,

Judge Parker appointed Messrs. Rice, Cox, Kazan, and Wartnick to act

as negotiating counsel for a mandatory Rule (b)()(B) class of future

claimants.

• On August , , an agreement in principle was reached to settle,

on a class-wide basis, all unfiled claims against Fibreboard for .

billion. The great bulk of this settlement (. billion) came from the

insurers; the remainder ( million) came from Fibreboard.

• At the same time, Fibreboard’s insurers agreed to provide Fibreboard

with  million to be used to defend and pay all `resently filed claims

(other than those claims that had previously settled and were being renegotiated). This settlement was contingent on approval of the class

settlement.

• Also at the same time, Fibreboard and its insurers agreed to a “backup” agreement in the event that the settlement of unfiled claims was

not approved. This agreement was called the “Trilateral Settlement

Agreement,” and provided Fibreboard with  billion (. billion

plus  million) to defend and pay all filed and unfiled claims.

The impetus for the final flurry of negotiations was an appellate argument slated for August  in the insurance coverage case. Both Fibreboard

. The face value of the settlements subject to renegotiation approached or exceeded

. billion. It was estimated that this undertaking to renegotiate was worth at least  billion.

. Asbestos Litig.,  F. d at  n.. Since Continental agreed to fund some payments

under this agreement, however, the Substitute Ness Motley Agreement reduced the level of

average compensation paid to claimants from the level in the Initial Ness Motley Agreement.
 Mass Tort Settlement Class Actions

and its insurers had a great deal to lose if the appellate court found against

them, and wished to avoid the all-or-nothing risk of the appellate judgment.

History of the Lawsuit

Ahearn v. Fibreboard Corp. was filed on September , . It alleged that

the case should be certified as a Rule (b)()(B) class action. In Ahearn, one

representative had asbestosis, one had mesothelioma, and one had no present injury. No spouses or legal representatives were named as representatives. The class that the representatives sought to represent included () all

persons that had been exposed to Fibreboard asbestos prior to August ,

, but as of August , , had not filed suit or settled a claim against

Fibreboard; and () all past, present, and future spouses, children, and others that could assert a derivative claim. No subclasses were established.

On September , Judge Parker provisionally certified the class and enjoined further suits against Fibreboard. Subsequently, Fibreboard brought a

third-party mandatory defendant class action against all entities that might

file contribution or indemnity claims against it. Owens-Illinois was named

as the third-party class representative.

The early stages of the litigation focused on structural issues and finalization of the various agreements. Judge Parker granted Continental and Pacific the status of party-intervenors; appointed Messrs. Rice, Cox, Kazan,

and Wartnick as class counsel; and appointed Professor Eric Green as

guardian ad litem for the class. The Trilateral Settlement Agreement was

finalized on October , . The underlying Global Settlement Agreement

was finalized on December , , as was the Third-Party Claimant Class

Settlement Agreement.

The parties then began preparing for the fairness hearing. Full rights of

discovery were accorded the parties. Objectors filed requests for document

production and took numerous depositions. Unlike Bowling or Georgine,

depositions of the settling counsel were permitted.

On June , , at the insistence of Continental and Pacific, a separate

suit, Continental Casualty Co. v. Rudd, was filed seeking declaratory and

injunctive relief against two mandatory, non-opt-out classes: the plaintiffs

in Ahearn and the potential third-party claimants against Fibreboard. The

insurers sought a declaration that the back-up Trilateral Settlement Agreement was fair and reasonable, and extinguished the rights of defendant class

members against the insurers.

Shortly afterwards, on December , , the fairness hearing commenced on the Ahearn global settlement. It lasted for eight days, spread over
Asbestos Exposure Redux: Ahearn v. Fibreboard Corp. 

two weeks in December and January. Standard trial processes—opening

and closing statements, as well as direct and cross-examination—were accorded the proponents and objectors to the settlement. Numerous experts

testified. In addition, some of the settling counsel (including Mr. Cox and

Fibreboard’s attorney) were called as witnesses. The guardian ad litem also

presented a statement.

On February , , a trial was held in Rudd. At the end of the trial,

the two defendant classes consented to the relief requested by the insurers.

After notice, the court held a fairness hearing on May , . The hearing

lasted one day and incorporated much of the evidence from the Ahearn

hearing.

On July , , the court issued an opinion in which it certified

Ahearn as a non-opt-out class action under Rule (b)()(B) and Rudd as a

non-opt-out class action under Rules (b)()(A), (b)()(B), and (b)(). The

court found the global settlement and the back-up Trilateral Settlement

Agreement to be fair and reasonable, and it approved them.154

Objectors appealed in both Ahearn and Rudd. The Fifth Circuit affirmed

both cases, with Judge Smith dissenting.155 Objectors in Ahearn petitioned

for a writ of certiorari, but objectors in Rudd did not. On June , , the

day after it decided Amchem, the Supreme Court vacated Ahearn and remanded with instructions to consider the case in light of Amchem.

156 On

January , , the Fifth Circuit again affirmed the judgment in Ahearn

in a short per curiam decision, with Judge Smith again dissenting. In its

operative paragraph, the majority found that “[T]here are two differences

between this case and Amchem. First, this class action proceeded under Rule

(b)(); Amchem was a Rule (b)() case. Second, there was no allocation

or difference in award, according to the nature or severity of injury, in the

present case as there was in Amchem ; in the case here all members of the

future claimant class are treated alike.”157

. Ahearn v. Fibreboard Corp.,  F.R.D.  (E.D. Tex. ). An amended judgment in Rudd was submitted on August , .

. Asbestos Litig.,  F.d . A petition for rehearing with a suggestion for rehearing

en banc was denied. In re Asbestos Litig.,  F.d  (th Cir. ). The denial was not

without some controversy. Only eleven of the seventeen judges of the Fifth Circuit participated in the decision on the petition. Of these eleven, six voted for rehearing, and five did

not. Although the six were a majority of those deciding the issue, they were not a majority of

the entire court, thus requiring denial of the petition. See id. at  (Smith, J. dissenting).

. Flanagan,  S. Ct. ; Ortiz,  S. Ct. .

. In re Asbestos Litig.,  F.d  (th Cir. ).
 Mass Tort Settlement Class Actions

Since the judgment in Rudd is now final, the back-up Trilateral Settlement Agreement is already in place. After the reaffirmance in Ahearn, however, parts of the Trilateral Settlement Agreement will be superseded by the

Global Settlement Agreement unless Ahearn’s judgment is reversed in further proceedings in the Fifth Circuit or the Supreme Court.

Settlement Terms

The terms of the settlements are complex. The easiest way to unpack them

is to examine first the insurance settlements with Fibreboard, and then to

understand how the moneys provided in that settlement affected class

members.

As a result of the April , , agreement and the Trilateral Settlement

Agreement, several matters were established:

• Continental agreed to renegotiate and pay the claims of all prior cases

that Fibreboard had settled (many of which involved an assignment of

Fibreboard’s rights against Continental). The total value of this undertaking was thought to be in the range of  billion.

• Continental and Pacific agreed to pay Fibreboard  million, with

which Fibreboard could pay unsettled claims filed prior to August ,

, as well as costs of defense in these cases.

• Continental and Pacific agreed to pay Fibreboard . billion that Fibreboard could use to pay claims and defense costs for all future asbestos claims asserted by victims or third parties.

• Fibreboard released Continental and Pacific from any further responsibility under their policies.

The Trilateral Settlement Agreement, which was negotiated after the

Global Settlement Agreement, acted as a back-up in the event that the

Global Settlement Agreement failed. The Global Settlement Agreement did

not affect the commitment to renegotiate prior settlements or to provide

 million to settle existing lawsuits. It did, however, propose to settle, on

a mandatory class basis, all claims of the future Global Health Claimants

and the Third-Party Claimants. Its basic terms were as follows:

• The Global Health Claimant class received . billion, . billion

of which came from the insurers and  million of which came from

Fibreboard.

• A trust mechanism was established to distribute proceeds.

• The Third-Party Claimant class received no immediate compensation.

Fibreboard agreed not to sue members of the class for contribution or

indemnity, and third-party class members agreed not to sue Fibre-
Asbestos Exposure Redux: Ahearn v. Fibreboard Corp. 

board. Third-party class members were entitled to receive the offset

provided by state law for moneys paid a plaintiff by the Fibreboard

trust, and if a plaintiff collected from a third-party member before

collecting from the Fibreboard trust, the third-party member became

entitled to obtain payment from the trust.

• A release of the insurers by the claimants and Fibreboard, and an

agreement that the trust would hold the insurers harmless.

Therefore, if the Ahearn settlement were approved, Fibreboard’s obligation to all plaintiffs with unfiled claims would be capped at . billion,

only  million of which came from its own assets. If the settlement were

not approved, it bore full exposure for all unfiled claims, but it had a pot of

. billion (plus its own assets) with which to pay off such claims. In either event, as long as the Trilateral Settlement Agreement was approved, the

insurers had bought total peace, and had no further obligations for Fibreboard’s present or future asbestos claims.

Critical to the Ahearn settlement was the distribution plan for the class

claims. A trust was established to handle distributions. Payments were made

to persons that fell into one of five disease categories: () mesothelioma; ()

lung cancer; () other cancer (larynx, pharynx, esophagus, stomach, colon,

or rectum);158 () asbestosis or else multi-site lung fibrosis consistent with

asbestos exposure and not involved with other disease processes;159 or ()

pleural changes such as plaques or thickening. Like Georgine, fear or increased risk of cancer claims were not compensable. Unlike Georgine, asymptomatic pleural changes were compensable. Moreover, unlike Georgine,

there were no restrictive medical, frequency, or duration requirements for

eligibility; all that was required was proof of exposure and a diagnosis of a

scheduled disease by a qualified physician. And, unlike Georgine, persons

with other disease processes were able to receive compensation from the

trust if the claim was substantially comparable to one of the five scheduled

diseases.

After satisfying itself of a claimant’s eligibility, the trust was to evaluate

the case based on a range of factors (such as age, dependents, income, functional impairment, smoking history, and responsibility of other parties),

and then determine the full settlement value of the case. After doing so, it

was to determine Fibreboard’s share of this settlement value using two

. Georgine did not permit compensation for cancer of the pharynx; otherwise the categories were the same.

. Again, the Georgine criteria were more restrictive.
 Mass Tort Settlement Class Actions

methods: discounting for non-Fibreboard exposure, and considering historically comparable settlement values. If these two methods agreed, the

trust would offer that amount. If the values disagreed, the trust would offer

a settlement somewhere between the two values.

Claimants dissatisfied with the trust’s offer could either negotiate further

or proceed to mediation. If no resolution occurred within thirty days of the

mediation, the claimant could submit to either binding or non-binding arbitration. In the event that non-binding arbitration was chosen, a stilldissatisfied claimant could reject the award and seek a mandatory settlement

conference with Judge Parker or his successor. The trust was able to make

an offer that remained in effect for another thirty days. If still dissatisfied,

the claimant could file suit. If a claimant ran this ADR gauntlet and succeeded at trial, the trust paid the judgment.

A trial, however, would have important limitations. First, Fibreboard

retained all its defenses. Second, its liability was several; it could be held

responsible only for its share of responsibility. Third, no punitive damages

could be sought. Fourth, a cap of , was placed on recovery.160

Third-party claims were handled in a similar fashion, although there was

no option to file suit.

Although there were no case-flow limitations as there had been in

Georgine, the trust had certain spendthrift provisions that limited the

amount of money that could be paid in a given year to annual earnings of

the trust plus a fraction of the principal. If the spendthrift provisions kicked

in, more serious claims were paid first. Other claimants were deferred to

future years, where they had priority over later-filed claims in the same

category (but not over later-filed claims in a higher disease category).

Class attorneys’ fees were not to exceed % of the settlement, were to be

paid by Fibreboard’s insurers, and were subject to approval by the court.

Counsel that represented claimants before the trust were entitled to costs

and a fee not to exceed % of the compensation paid (net of costs).161

. To some extent these limitations were more theoretical than real. Fibreboard had

never paid a punitive damage award, and had paid more than , in only a small handful of cases. Since the per-injury limit in the insurance policy was ,, the ,

cap was the most that plaintiffs could likely have expected in any event.

. Subsequently fees of approximately  million, or slightly less than % of the total

recovery, were awarded to class counsel and counsel for one intervenor.
Asbestos Exposure Redux: Ahearn v. Fibreboard Corp. 

Handling of Future Claims

Like Georgine, Ahearn combined in one class action both plaintiffs with present claims and “future plaintiffs.”162 A guardian ad litem was appointed in

order to provide additional protection to class members against the possibility that class counsel’s representation of claimants with already-filed cases

created a conflict of interest. But no protections or precautions were taken

to ensure representation of the special interests of future plaintiffs in the

settlement class.

Notice Procedure

An extensive notice campaign—a  million effort that was probably the

most comprehensive in the history of class action practice—was funded by

the insurers. The notice plan, which was developed and implemented by the

firm that had also done the Georgine notice, was more extensive than

Georgine in several regards. Individual notice was mailed to every victim

whose name was known, as well as to all co-defendants, most major insurers, and most large shipbuilders. Like Georgine, extensive notice was provided to trade and union organizations; notice was also provided to various

industry groups and to the American Association of Retired Persons. Lawyers who had handled asbestos claims were notified. Complete notice packages were sent to , class members in Georgine, , persons requesting notice, and , persons known to have worked at job sites that

used Fibreboard products. In total, more than . million complete notice

packages were mailed.

The media campaign was equally extensive. Summary notice was published in Parade, USA Weekend, and Business Week. Advertisements were

taken out in  newspapers in  markets, followed by a second wave of

advertising in  newspapers in the  of these markets that had the highest

historic asbestos litigation. Television advertising also occurred in two

rounds: national advertising of a -second spot in  markets that reached

.% of American households with televisions an average of . times, followed by , repeats of the same spots on cable and local television in the

 largest markets. Advertising was also placed in  Spanish-language

newspapers, and in  newspapers in  foreign countries (involving  foreign languages). Television spots were purchased on  Spanish-language

stations. Promotional and public relations material was also prepared. A

. For the definition of “future plaintiffs,” see supra note .
 Mass Tort Settlement Class Actions

toll-free phone number was established, and a question-and-answer booklet

was provided with the complete notice package.

Approval and Review Process

Full rights of discovery were accorded to the objecting parties. The hearings

utilized standard trial procedures. Experts in a range of fields (legal, ethical,

financial, and claims administration) testified. The court also obtained information from a guardian ad litem.

Like Georgine, Ahearn required the court to examine the case both for

procedural impropriety and for substantive insufficiency. The concern for

collusion arose from the possibility that the class counsel had sold out the

Ahearn plaintiffs in return for a better deal on their present claims. Unlike

Georgine, the objectors were not able to demonstrate a clear disparity in

treatment for present and future claimants, since no specific dollar amounts

or ranges were assigned to the future claims.163 Moreover, given that the

Substitute Ness Motley Agreement was agreed upon on August , , and

that the unfiled plaintiffs’ settlement negotiations did not begin in earnest

until August , , it is difficult to find the same external indicia of collusion that were present in Georgine.

Some reasons for concern did, however, exist. First, while its insurers

paid billions, Fibreboard walked away from the settlement with all but 

million of its own  million in assets intact. Second, half of the amounts

payable under the Substitute Ness Motley Agreement to the present clients

of Messrs. Rice and Cox was contingent on either a global settlement that

provided the insurers with total peace or a judgment for Fibreboard in the

coverage litigation. Since the latter contingency was clouded with uncertainty, Messrs. Rice and Cox had an arguable reason to push the class settlement even if it was not in the best interests of the class. Third, Ness,

Motley was the same firm of whom collusion had been suspected in

Georgine (albeit on rather different facts).164 Fourth, claimants with settled

cases, claimants with filed but unsettled cases, and claimants with unfiled

claims were all competing for Fibreboard’s limited resources (which

amounted to  million plus the value of the chance of victory in the California coverage litigation). Under the various settlements, these claimants

. Objectors apparently tried very hard (and very unsuccessfully) to prove a differential

in the district court. They essentially abandoned the argument on appeal.

. This concern was somewhat muted, since the other class counsel in Ahearn, Messrs.

Kazan and Wartnick, were objecting to the settlement in Georgine.
Asbestos Exposure Redux: Ahearn v. Fibreboard Corp. 

had different levels of risk. Present claimants got full payments, subject to

some downward renegotiation. Filed but unsettled claimants ran the risk

that  million (plus Fibreboard’s post-settlement assets) would be insufficient to pay their claims in full. Claimants that had not yet filed (especially

those in the far future) ran the risk that the trust’s assets would be insufficient to pay their claims. Since class counsel’s settled claims fared best, collusion was one (but again only one) explanation for the greater risk levels

that the filed but unsettled and unfiled claims assumed.

The court found that none of these concerns demonstrated collusion.

The court sought to dispel the idea of collusion by repeatedly stating in its

opinion that negotiations were “hard-fought” and “arm’s-length.”165

The court used a “fair, reasonable and adequate” standard as the ultimate

test in determining whether to approve the settlement.166 To guide this decision, the court cited six factors: () existence of fraud or collusion; ()

complexity, expense, and likely duration of litigation; () stage of proceedings and amount of discovery completed; () probability of plaintiffs’ success on the merits; () range of possible recovery; and () opinions of class

counsel, class representatives, and absent class members.167

Serious questions about the Ahearn class’s satisfaction of Rules (a)(),

(a)(), and (a)() existed. Whether the class satisfied Rule (b)()(B) was

also disputed. In resolving these issues, the court’s opinion went through

each of the relevant Rule  elements separately, and at some length. It began with the observation that some courts had relaxed the Rule  standards

in the settlement context, but eschewed that approach and assumed (correctly, in retrospective light of Amchem) that “Rule (a)’s requirements are

no different in the settlement context than in the litigation context.” 168 The

opinion also avoided in part the trap into which Bowling and Georgine

stepped. Rather than focusing on the class’s common and typical interest in

an expedient settlement, as the earlier two cases had erroneously done,169

the opinion focused on the class’s common and typical interest in reducing

the risk from the insurance coverage litigation—which is the type of pre-

. See Ahearn,  F.R.D. at , , , .

. Id. at .

. Id.

. Id. at . The Fifth Circuit did not directly address this issue, although it noted

(correctly in light of Amchem) that the factor of settlement and the evidence adduced at a

fairness hearing can be considered in deciding whether Rule ’s elements have been met.

Asbestos Litig.,  F.d at .

. See supra notes –, – and accompanying text.
 Mass Tort Settlement Class Actions

settlement interest that Amchem permits courts to consider.170 The court

did, however, identify common interests in the settlement as a factor favoring typicality; this, Amchem’s subsequent analysis suggests, the court

should not have done.171

While the Rule (a) analysis appropriately identified one common presettlement interest, the opinion avoided any inquiry into other presettlement interests (such as individual medical and exposure histories and

differing state law) that suggested less commonality and typicality among

class members.172 Second, the court’s opinion did not address the fact that

only those persons exposed to Fibreboard asbestos before  had a direct

interest in avoiding the risk of the coverage litigation; post- exposure

victims had no legal entitlement to the insurance proceeds, and therefore a

somewhat different interest in the resolution of the dispute.173 How that

difference should have played into the analysis was not explored.174

The court broke the adequacy of representation issue into two parts: ()

the adequacy of (and conflicts for) class counsel and () the adequacy of the

named representatives. The former issue has already been explored.175 With

respect to the adequacy of the representatives themselves, the court focused

on some of the potential intra-class conflicts (primarily pre- vs. post-

 and presently injured vs. future plaintiffs), but did not focus on others

. See supra note  and accompanying text.

. See Amchem,  S. Ct. at – (noting that common interest in settlement could

not satisfy predominance requirement of Rule (b)()); id. at  n. (suggesting link between this requirement and Rule (a)() typicality requirement). The Fifth Circuit seems to

have come closer to contravening Amchem’s subsequent analysis since it focused more on

common settlement interests and less on common pre-settlement interests. See Asbestos Litig.,

 F.d at –.

. In fairness to the court, it had done such an analysis before. See Jenkins v. Raymark

Indus., Inc.,  F.R.D.  (E.D. Tex. ), aff’d,  F.d  (th Cir. ). But Ahearn

was a far more sprawling affair than Jenkins.

. Obviously, post- victims had an interest in a financially healthy Fibreboard, and

to the extent that a resolution of the coverage case helped to assure that fact, they too had an

interest in its resolution. But that interest is distinct from the interest of those who were

arguably entitled to insurance proceeds. Indeed prior to the settlement, post- claimants

had tended to receive “substantially lower” payments from Fibreboard in settlement than

pre- claimants. Notice of Class Action, Global Settlement and Third Party Claimant

Class Settlement and Hearing, Ahearn v. Fibreboard Corp., No.  :  c v   at  (E.D. Tex.)

(copy on file with author).

. The Fifth Circuit also did not discuss the question. See Asbestos Litig.,  F.d at

–; Asbestos Litig.,  F.d .

. See supra note  and accompanying text.
Asbestos Exposure Redux: Ahearn v. Fibreboard Corp. 

(near vs. far futures, direct claimants vs. derivative claimants, claimants who

fit within the scheduled diseases criteria vs. claimants who did not). Rather,

the court asked whether the class representatives, who were named after the

settlement had been essentially agreed to, had an adequate stake in the litigation. It held that they did.176

In making its ruling on Rule (b)()(B), the court focused on the “limited fund” theory that has become increasingly popular in mass tort litigation.177 The limited fund in the case was the . billion provided by the

insurers and the other assets of Fibreboard. Whether this is an appropriate

use of Rule (b)()(B) is unclear for several reasons;178 but, on the assumption that this use is permissible, the court’s analysis seems generally sound.

There was, however, one fact-specific concern, raised by the objectors,

about the use of Rule (b)()(B): Fibreboard paid fewer than all of its assets

into the settlement. Whether there can be a “limited fund” class action

when less than all of the possible fund is placed before the court is a difficult

issue,179 and could lead to serious consequences if counsel’s collusive decision to settle a case for a small pot of dollars then gave the defendant the

ability to argue that this pot entitled it to use a non-opt-out class action.

The court resolved the problem by stating that fewer than all of a defendant’s available assets can constitute a limited fund as long as the underlying

settlement is fair.180 Whether this approach violates Amchem’s holding that

. Ahearn,  F.R.D. at –; Finding of Facts –, –, Ahearn v. Fibreboard Corp., No.  :  cv (E.D. Tex., July , ). The Fifth Circuit explored the pre-

 and post- conflict and the “near vs. far” conflict, but not the others. Asbestos Litig.,

 F.d at –.

. See In re A.H. Robins Co.,  F.d ; Agent Orange,  F.R.D.  (“limited

fund” certification for punitive damages only). But see Northern Dist. of Cal. Dalkon Shield,

 F.d  (rejecting “limited fund” theory in mass tort case). Because the possibility of a

loss in the insurance coverage litigation also threatened to impair the interests of class members, the parties were also able to invoke Rule (b)()(B) even without using the “limited

fund” concept.

. For some of the possible problems with this use of Rule (b)()(B), see Asbestos

Litig.,  F.d at –.

. An equally difficult issue is whether a limited fund class can be certified when fewer

than all the claimants against the fund (in Fibreboard’s case, both tort and non-tort creditors) are present in the case.

. Ahearn,  F.R.D. at .
 Mass Tort Settlement Class Actions

a settlement’s fairness does not override the procedural protection of Rule

(a) and (b)181 is uncertain.

Objectors also raised the argument that a mandatory class action in a

case seeking money damages was unconstitutional. This argument derives

from the Supreme Court’s decision in Shutts, in which a state class action

that provided absent `laintiffs with an opt-out right was held constitutional.

Whether such an opt-out right is constitutionally required in cases involving money damages, and whether such a right would apply to federal class

actions, were not addressed in Shutts; nor has the Supreme Court subsequently resolved the issue.182 The Fifth Circuit resolved the matter by

holding that Shutts did not apply to Rule (b)()(B) class actions.183

Modifications in Traditional Adversarial Roles

Ahearn and Rudd presented several possible conflicts of interest for the lawyers. The stake that class counsel’s present claimants had in a successful settlement of the unsettled and unfiled claims generated certain ethical concerns. Prior to the settlement, post- claimants, who had no possible entitlement to insurance proceeds, had tended to receive substantially lower

settlements from Fibreboard than pre- claimants; under the settlement,

both groups were treated as near-equals.184 The failure either to designate a

class representative with a consortium claim or to provide any compensation for those claims meant that the derivative rights of these claimants were

not fully represented. 185 A potential conflict between already-filed and un-

. Amchem made clear that it was not addressing Rule (b)()(B) in its discussion. See

 S. Ct. at  n.. Its recognition that settlement is sometimes, but not always, relevant

to satisfaction of Rule ’s criteria, see id. at –, could cut in either direction with respect to this issue.

. See Shutts,  U.S. , supra note  and accompanying text.

. Asbestos Litig.,  F.d at –.

. The only point at which the different positions of pre- and post- claimants

might be considered was the trust’s consideration, as a factor in making its settlement awards

of the historical settlement averages of “similar cases.” It is not clear, however, whether pre-

 or post- status was a relevant factor in deciding “similarity” of cases. Moreover, the

use of historical settlement averages was not the only method used to determine the trust’s

settlement offers. Thus, post- claimants were likely to fare better under the trust than

they had in litigation. Pre- claimants did not necessarily fare worse, although the risk

that the trust’s assets would eventually be exhausted created some tensions between post-

claimants and “far” pre- claimants.

. This problem is particularly acute for “future futures”—future spouses and children

not yet born. See supra note  and accompanying text.
Asbestos Exposure Redux: Ahearn v. Fibreboard Corp. 

filed claims also existed, although a series of precautions made this concern

more hypothetical than real.186 Since the potential for the insolvency of the

trust fund was hardly speculative, near and far claimants also had divergent

interests. In this regard, the major conflict lay between the present and near

claimants (both of whom were fairly well guaranteed payment for an historical settlement average) on the one hand, and the far claimants (whose

payment was less assured) on the other.

Like Georgine, significant questions of class counsel’s ability ethically to

represent both present and future claimants were fully vented at the fairness

hearing and in the district court’s findings of fact and opinion. Unlike

Bowling and Georgine, however, these issues could not be muted by allowing

class members to opt out. Hence, the ethical questions of a single class and

simultaneous representation were starkly presented.

Assessment

In many ways, it appears that the lawyers in Ahearn went to school on

Georgine, and tried to craft an even more airtight asbestos settlement. As in

Georgine, the broad-ranging discovery and exhaustive fairness hearing in

Ahearn gave a strong sense that the court’s ultimate decisions were wellinformed and based on credible evidence; in Ahearn, however, more discovery was allowed and an even greater sense of confidence in the approval

process was engendered. Some of the restrictive criteria for compensation in

Georgine were removed in Ahearn. Separate negotiation periods and the settlement’s effort to mimic the tort system reduced some of the intra-class

conflicts that infected Georgine. As in Georgine, the notice campaign was

extensive; in Ahearn and Rudd, however, the campaign was even more comprehensive, and again created a greater sense of confidence. The extensiveness of the campaign is ironic, since, as mandatory class actions, Ahearn and

Rudd were the cases least in need of comprehensive notice. Be that as it

may, as a general matter the settlement in Ahearn has a sturdier feel that the

settlement in Georgine.

Given the similarity of the issues in Georgine and Ahearn, it is surprising,

and somewhat troubling, to see the rather significant differences in the two

settlements on important matters such as procedures used (opt-out vs.

mandatory), compensation mechanisms (defendant-controlled vs. trust

. The primary protection was the fact that the trust’s offers to future claimants were

to be consistent with historical settlement patterns in prior claims.
 Mass Tort Settlement Class Actions

mechanism), compensation levels (scheduled payment ranges vs. replication

of tort compensation), eligibility criteria, and limitations on the exercise of

back-end opt-out rights. Some of these differences were driven by the Fibreboard coverage litigation and the insurers’ demands for total peace.

Nonetheless, it is undeniable that a person who worked with both Fibreboard products and CCR-defendant products on the same job received two

markedly different processes for recovery. This larger issue of fairness and

equality was never raised by the parties or the courts in either case.

The insurers’ insistence on total peace also made this the most structurally complex of the settlements under study. The posture of the insurance

coverage litigation provided Ahearn with a flavor and a set of procedural

and substantive twists that were present in no other case. The posture of

Ahearn also created the unique factual hook that the parties and court used

to justify the use of a mandatory class action. How useful Ahearn can be in

other settlement class-action contexts is therefore uncertain.

The questions of commonality, typicality, and adequacy of representation were somewhat different in Ahearn than in Georgine, but the common

issue of how best to conceptualize class interests remained. Divergent interests among class members existed, yet no subclasses or separate classes were

established. Clearly, mass tort settlement class actions are raising difficult

ethical issues for counsel, and the way in which one conceives of the lawyer’s role and resolves these ethical issues may well determine whether settlement class actions can ever be utilized. They also raise different but comparable issues about the judicial role in certification and approval decisions

in mass tort settlements.

Ahearn took significant precautions that sought to “perfect” the mass

tort settlement class action. Whether even these precautions were adequate

is the central question raised by these cases. Indeed, the overarching lesson

of Bowling, Georgine, and Ahearn is that it is impossible to decide whether

mass tort settlement class actions are a good idea without first clarifying the

roles and ethical demands that lawyers and judges in these broad-sweeping

social controversies must meet.


Breast Implants: Lindsey v. Dow

Corning Corp.

Introduction187

After silicone gel products became the preferred breast implantation devices

in the s, hundreds of thousands of women worldwide received silicone

gel implants. Spurred on by two large judgments in the early s and an

FDA moratorium on silicone gel breast implants in , the breast implant

litigation had the most explosive and meteoric rise among the mass torts

under study. Within a few months of the FDA action, hundreds of state

and federal suits had been filed; within two years, a global, . billion class

settlement had been engineered; within three years, the settlement had collapsed and a major American corporation had filed for Chapter  reorganization.

The rush of filings in the early s led to efforts to consolidate cases.

Reacting to the  cases already filed in the federal system, the Judicial

Panel on Multidistrict Litigation, on June , , consolidated the federal

cases for pretrial purposes before Judge Sam Pointer, Jr. of the Northern

District of Alabama.188 By September , the number of cases consolidated in the MDL proceedings had risen to nearly ,.

In , Judge Pointer appointed a group of five lawyers, selected from

the seventeen lawyers on the plaintiffs’ steering committee, to serve as negotiating counsel. By the end of , the largest manufacturer of implants,

Dow Corning, and two other major defendants had negotiated a settlement

. With the exception of clarifying footnotes and citations for direct quotations, no

footnotes or other citations to record sources will be used in this case study. Persons interested in the sources for the factual assertions made in this case study should refer to Tidmarsh, supra note , at –.

. In re Silicone Gel Breast Implants Liab. Litig.,  F. Supp.  (J.P.M.L. ). At

the time of transfer, Judge Pointer had no breast implant cases pending before him. Id. at

 n..
 Mass Tort Settlement Class Actions

of their claims for roughly  billion. Further rounds of negotiation resolved

the divisions of funds among claimants, the precise language of the agreement, and the percentage contributions among defendants. By the time

other defendants had signed on, the face value of the settlement had risen to

. billion.189 It is the largest settlement in this study—and the largest

mass tort settlement ever.

That such a large settlement would occur in the Silicone Gel litigation is

surprising. Although aggressive pretrial discovery had been conducted, there

were few verdicts or settlements on which to base appropriate settlement

values. The scientific evidence on causation was, and still is, murky.190

Overall, the Silicone Gel litigation was an immature tort.

History of the Lawsuit

On March , , the plaintiffs filed Lindsey v. Dow Corning Corp., a

class-action complaint designed to give effect to the settlement. The Lindsey

complaint listed seven plaintiffs, all of whom were women with breast implants. The class they sought to represent included the following: () all persons—in the United States and worldwide—who “have or may have in the

future (whether filed or unfiled, existing or contingent, and specifically including claims for injuries or damages not yet known or manifest)” any

claims arising out of a breast implant manufactured by a settling defendant

before June , ; () all children of these class members prior to the date

of notice; and () spouses, children, parents, and others with claims based

on their relationship with implant recipients or their children.191 There were

no subclasses to distinguish women from children, presently injured from

presently healthy, “near” future-injured from “far” future-injured, wife from

husband, or foreign from domestic.

. This amount represented the face value of the settlement. Since payments by many

of the main defendants were to be made over the course of thirty years, the present value of

the settlement was less.

. In  Judge Pointer appointed a panel of experts to help determine the validity of

some of plaintiffs’ claims regarding long-term or chronic disease processes. For the original

order and updates on the progress of the panel, see <http://www.fjc.gov/BREIMLIT/

ORDERS/orders.htm>.

. After the fairness hearings, the court excluded from the class those persons who lived

in Australia, Ontario, and Quebec. These persons were, however, free to affirmatively opt in.

In re Silicone Gel Breast Implant Prods. Liab. Litig.,  WL , at * (N.D. Ala.).

The court also limited the class of children to those born prior to April , . Id. at *–.
Breast Implants: Lindsey v. Dow Corning Corp. 

On April , , the court entered an order that preliminarily approved

the settlement, conditionally granted class certification under Rule (b)(),

approved a notice plan, and scheduled a fairness hearing.192 The preliminary

approval precipitated a flood of filings either seeking compensation from

the settlement,193 opting out of the settlement, or objecting to the settlement. No formal discovery was conducted in advance of the hearing, although some information was informally requested and produced.

The fairness hearing was spread out over three days: August , , and

, . Didactic presentations were made; there was no testimony, and

therefore no direct or cross-examination. No medical or legal experts testified, although two doctors submitted affidavits. The hearings opened with

remarks from plaintiffs’ counsel, after which persons (some class members,

some lawyers) were able to speak for or against the settlement. The hearing

closed with remarks from members of the plaintiffs’ steering committee.

The court certified the class (with some modifications) and approved the

settlement (also with some modifications) on September , .

194 Problems began to develop almost immediately. First, , class members

chose to opt out of the settlement. Since the defendants had expressly reserved the right to withdraw if the number of opt outs was excessive, the

settlement weathered its first crisis when the defendants decided on September  to remain in the settlement. Second, the number of class members

that filed claims vastly exceeded expectations; the settlement had been negotiated in the expectation that only , claims would be submitted, but

approximately , claims were ultimately filed. Since the . billion

fund was the maximum that the defendants had agreed to pay, this number

of claims meant that the claimants’ recoveries would be severely “ratcheted

down” from the original amounts projected in the settlement. Under the

agreement, current claimants who had not initially opted out retained a

second right to opt out in the event that “ratcheting down” occurred. Although the exact amount of ratcheting down was unknown, the settling

defendants faced a hard choice: contribute more (possibly much more) to

the settlement or face great numbers of new opt-out claims.

. In re Silicone Gel Breast Implant Prods. Liab. Litig. (MDL ),  WL 

(N.D. Ala.).

. By the time of the fairness hearing in August, more than , claims had been

submitted. The number of claims eventually mushroomed to ,.

. Silicone Gel,  WL .
 Mass Tort Settlement Class Actions

Negotiations to revamp the settlement continued during the next several

months. Ultimately, however, an impasse was reached, and on May , ,

Dow Corning, which had originally agreed to fund  billion of the settlement, filed a petition in the Eastern District of Michigan for Chapter 

reorganization. Shortly thereafter, an analysis of the claims suggested that

claimants would be able to receive only % to % of the amount originally

promised in the settlement, and that full funding of the settlement at the

originally agreed-upon values would require additional contributions of 

billion. On October , , Judge Pointer sounded the death knell of the

settlement, stating that there was “no justification for keeping the current

settlement in place.” 195 He allowed all class members who so desired to opt

out of the settlement.

Toward the end of , after the court’s continued efforts at mediation,

five of the original Lindsey defendants proposed a new settlement of claims

against them. Class counsel declined to recommend the settlement, and no

class representative consented to the proposal.

The court stated that it retained the “reserved general supervisory

authority” under the original settlement to approve the revised settlement.196 Its reasoning was that the original settlement, to which class counsel and class members had consented, had warned of the possibility of

“ratcheting down” of benefits, and had stated that a second opt-out opportunity would be provided. The revised settlement provided less severe

“ratcheting down” than the original settlement would have done, and provided class members an individual opportunity to opt out after being told of

the amount of their revised benefit. Since the revised agreement merely notified claimants about changes in the terms of the original settlement, there

was no need for consent prior to the settlement’s approval.

The court approved the revised settlement agreement on December ,

.

197 It issued the approval order sua sponte—without notice, arguments,

briefing, or a fairness hearing. Under the order, a new notice period was

established, and Lindsey class members were again able to opt out of the

. -- WLN , at  (quoting Order No. , Lindsey v. Dow Corning Corp.,

No. -CV- (N.D. Ala., Oct. , )).

. See Breast Implant Litigation Notice, Lindsey v. Dow Corning Corp., No. CV -

P--S at  (N.D. Ala., Dec. , ) (copy on file with author).

. Order No. , Lindsey v. Dow Corning Corp., No. -CV- at  (N.D. Ala.,

Dec. , ) (copy on file with author). Final judgment on this order was entered under

Fed. R. Civ. P. (b).
Breast Implants: Lindsey v. Dow Corning Corp. 

settlement either before or after receiving notice of the amount that they

would receive in settlement.

Settlement Terms

Since Lindsey sought to include both persons presently suffering from an

implant injury and those who might suffer an injury in the future, the

original global settlement was rather complex. The revised, post-Dow

Corning bankruptcy settlement was simpler, and considerably different.

 Settlement. According to the original agreement, a basic distinction

was to be drawn between “Current Claimants” and “Ongoing Claimants.”

Current claimants were those suffering an injury that was immediately

compensable under the terms of the settlement; ongoing claimants were

those whose injury was not yet compensable, but might become so at a later

date. In order to be eligible for payment, both types of claimants were required to register with a claims office established by the agreement. A

claimant who failed to register by the appropriate date would become a

“late registrant” whose claim would be paid only if money remained to pay

timely filed claims.

After the claims office made a determination of eligibility, a claimant

became entitled to compensation. How much compensation was recovered

depended on several variables. The first was the fund from which the claimant sought funding. The agreement contemplated the creation of separate

funds. One fund, designed for current claimants, constituted .% of all

funds, or about . billion. The fund for ongoing claimants constituted

.% of all funds, or about . billion, but it was payable in yearly increments, so that only so much money would be available each year. The third

fund, called the “Designated Funds,” constituted .% (or  million)

of all funds, and was used to establish other programs and pay fees and

costs.198

. The designated funds included a reserve fund and discrete funds to reimburse class

members’ medical diagnosis and evaluation, to compensate for explantations, to compensate

ruptures not otherwise compensated under the fund, to pay certain other eligible claimants,

and to pay attorneys’ fees, costs, and costs of settlement administration.

Ultimately the court decided to set aside % of the total settlement for costs of notice,

administration, and attorneys’ fees. Thus, the net amounts in each fund were . billion in

the current claimant fund, . billion (payable in increments over thirty years) in the ongoing claimant fund,  million in the explantation fund,  million in the rupture fund,

 million in the implant recipient compensation fund,  million in the reserve fund, and

. billion in the fund for reimbursing administrative expenses and attorneys’ fees.
 Mass Tort Settlement Class Actions

Once the correct fund was determined, the next step was to determine

the appropriate level of compensation. This was a two-step task. The first

step was to fit the claimant onto a compensation grid. The grid had two

axes: a disease axis and an age axis. The disease axis contained the four disease processes for which compensation was allowed, as well as subcategories

based on severity. The age axis broke age into  and under, –, –,

–, –, and over . Once a person’s disease and age were known, the

grid provided the exact dollar amount of compensation. For instance, an

under- woman with lupus in the highest severity category received the

highest possible award:  million. The same-aged woman with the least

severe form of lupus received ,. A -year-old woman with severe

lupus received . million. A -year-old woman with mild lupus received

the lowest award in the grid: ,. Decisions about classification of a

claim were subject to appeal to the claims administrator, and ultimately to

the district court.

Once the scheduled amount had been determined, the second step of the

analysis came into play. Since the defendants provided only so much

money, it was possible that there would not be enough money to pay everyone’s claims at the scheduled rate. In that event, the agreement required

that the payments to eligible claimants be “ratcheted down” by reducing

compensation levels according to a predetermined formula. As a general

matter, the less severe diseases were ratcheted down first and most severely.

Significantly, ongoing claimants were entitled to compensation only at the

“ratcheted down” rate actually paid to current claimants, not at the scheduled rate.

Because of this “ratcheting down” effect, the agreement provided class

members with a second opt-out right that could be exercised at the time the

claimant learned the degree of ratcheting down. But important distinctions

existed between current and ongoing claimants with regard to their backend opt-out rights. First, current claimants who opted out retained “all

rights under applicable law that existed prior to the execution and approval

of this agreement,” including a right to assert claims for punitive damages;

while ongoing claimants who opted out at the back end were required first

to participate in non-binding mediation and lost the right to assert punitive

damages.199 Second, current claimants could opt out freely if their benefits

were ratcheted down, while ongoing claimants could opt out only if they

. Breast Implant Litigation Settlement Agreement, No. CV--P--S at , –

(N.D. Ala., Mar. , ) (copy on file with author).
Breast Implants: Lindsey v. Dow Corning Corp. 

were scheduled to receive less than the “ratcheted down” level of benefits

actually paid to current claimants.

No compensation was provided to children who had allegedly suffered

from a direct injury resulting from exposure to silicone. The agreement contemplated, however, that a medical panel could in the future permit such

compensation and establish eligibility guidelines. No compensation was

provided for derivative injuries. Nor were derivative claimants allowed to

opt out if the direct claimant remained in the class.

The settlement made three distinctions between domestic and foreign

claimants. First, a maximum of % of the current and ongoing compensation funds was set aside for foreign claimants, with the expectation that, as

in Bowling, compensation guidelines for foreign countries would be developed. Second, foreign claimants could not participate in the six “designated

funds.” Third, foreign claimants could not become “late registrants”; they

were simply barred from participating in the settlement. Finding the first

two of these limitations a bit draconian, the court refused to approve them

as written, instead stating that it intended to treat the % cap as a guaranteed set aside and ordering that % of the designated funds also be set aside

for foreign claimants. The court did not, however, seek to modify the third

restriction.

Each defendant reserved the right to withdraw if an excessive number of

opt outs occurred.

Neither an amount nor a method of calculating attorneys’ fees was stated

in the agreement.

 Revised Settlement. The revised settlement was entered into by Bristol-Myers, Baxter, M, McGhan, and Union Carbide, and was to run for

fifteen years. A current claimant was automatically entitled to an advance

payment of , (to be credited against later payments, if any) just for

remaining in the settlement class. Current claimants with implants from

one of the settling defendants had two additional options. First, they could

elect payment of a sum certain (ranging from , to ,) for various disabilities. The disabilities were rated in categories from A through D,

with certain disease processes fitting into each category. If a current claimant chose a sum certain, an additional amount (ranging from , to

,) was also paid for an envelope rupture. Unlike the original settlement, age was not a variable in determining compensation.

Second, a current claimant could gamble on a second option, under

which plaintiffs meeting a more restrictive set of medical criteria could be

eligible for payments of , to ,. If such a condition did not

develop within the fifteen years of the program, the claimant would get
 Mass Tort Settlement Class Actions

nothing more than a , advance payment—even if she met the looser

criteria for payment under the first option. Conversely, if a claimant took

the first option, she could never seek greater compensation under the second option, even if she later met those more restrictive criteria.

Ongoing claimants and late registrants to the Lindsey settlement were

entitled to participate only in the second option. But ongoing claimants

were entitled to an immediate , payment (to be credited against later

payments, if any) if they remained in the class.

In addition to these benefits, a person (other than a late registrant) who

underwent explantation was entitled to , for expenses of surgery.

Because the defendants paid only so much each year, it was possible, as

with the original settlement, that claims might be ratcheted down. An optout right was extended if that occurred, but no punitive damages could be

awarded in an opt-out trial. In addition, the settling defendants imposed a

 million cap on their obligations to pay under the second, higherbenefit option.

To avoid some of the problems of the  settlement, claimants were

first required only to register and submit information (if they had not already done so). They were then to be notified by the claims office about

their status and entitlement, if any, to compensation. Only after this notification were they required to decide whether to opt out.

Attorneys’ fees for recovery under this settlement were capped at % of

the first ,, .% of the next ,, and % of all amounts thereafter. Defendants also agreed to pay % of all amounts paid under this settlement into a “common benefit” fund that the court had previously established.

The revised program has had some effect. , notices were sent out,

, of which went to current claimants. , claimants opted out. Advance payments of either , or , have been sent to , claimants, with additional checks for , to , having been sent to

, of these ,. , also received the , explantation benefit.

Total settlement expenditures for the defendants thus far have amounted to

,,.

200

. See <http://www.fjc.gov/BREIMLIT/mdl.htm> (updated Mar. , ). This

source does not explain the discrepancy between the , notices sent out and the more

than , persons that either opted out or received settlement benefits. Moreover, when

combined with the  million cap on payment under the second option, the  million

payment under the revised settlement means that the settling defendants will pay no more

than . billion to settle their claims and are unlikely to pay even that much. The same de-
Breast Implants: Lindsey v. Dow Corning Corp. 

– Dow Corning Proposals. As part of its reorganization proceedings, in August  Dow Corning proposed to pay . billion to breast

implant victims. After rejection of that proposal, Dow Corning, in February

, increased the proposal by  million to approximately  billion.

Although it is uncertain that this proposal will be approved, some of its features are useful for comparative purposes. Unlike the original settlement,

but like the revised settlement, all breast implant recipients who opt for the

settlement will receive some cash—a minimum of ,. The maximum

recovery under the proposal would be ,, about % of the original

settlement amount but comparable to the amounts paid in the revised settlement. Like the revised settlement, a rupture claim would add , to

, to the base amount. A separate litigation trust was also established

to pay for women who preferred to try their cases, but payment from that

trust was contingent on a single trial at which a jury would have to determine that the implants caused particular illnesses. Under the revised Dow

Corning proposal, foreign women would receive % of the amounts due

to American women.

Handling of Future Claimants

Silicone Gel involved both presently injured claimants and those presently

healthy.201 Special precautions for the handling of future claims included a

medical panel to add future claims to the list of scheduled diseases, a weak

inflationary index, and the segregation of the fund from which future claims

would be paid. There were, however, problems with these arrangements.

First, and foremost, when the settlement was signed, it was unknown

how many present and future claimants there might be, or whether the

funds designated for future claimants (which constituted .% of the settlement proceeds) would be adequate. The negotiating parties had no statistical basis for their allocation decision; according to one objecting attorney,

the only justification for the allocation decision presented at the fairness

hearing was that the allocation was the result of bargaining among the parties. Second, the settlement contained a tension between near and far fufendants had been willing to contribute more than  billion to the original settlement. Of

course, the companies may have been willing to contribute less to the revised settlement

because they anticipated a greater number of opt outs under the revised settlement than they

had anticipated under the original settlement. Whether opt-out claims will push the total

liability of the companies above  billion is not presently known.

. For the definition of “future plaintiffs,” see supra note .
 Mass Tort Settlement Class Actions

tures. About half of the defendants’ payments were due in the first three

years; payments gradually phased down to a trickle of money in year .

Thus, ongoing (i.e., future) claimants that filed in the first three years were

more likely to see full payment (or at least a less severely ratcheted down

payment) than those filing in later years. Third, in one scenario some presently injured claimants were able to dip into the future claimants’ fund under some scenarios, thus reducing the pot for future claimants.202 Finally,

under the settlement agreement, future claimants sacrificed certain legal

claims that present claimants did not.

No procedural protections were provided for future claimants. No subclass for future claimants was established. Every lawyer on the plaintiffs’

steering committee represented some presently injured claimants; thus, no

counsel exclusively represented the interests of future claimants. No guardian ad litem was appointed.

Notice Procedure

The notice campaign for the  global settlement included the sending of

an individual notice to all known implant recipients. Many other recipients

became known when they called ordinary and toll-free phone numbers to

request information. By September , , more than , individual

notice packages had been mailed, with efforts still ongoing.

In addition to individual notice,  million was spent on advertising in

newspapers, in magazines, and on television. Audiotapes were prepared for

use on radio. The settlement was also widely reported on television and radio, and in newspapers. Press kits and promotional materials were also developed, and information was placed on the Internet.

Foreign notice was handled differently. First-class mail was used for

, known claimants, a “short-form” notice was translated into ten languages, and press releases and press kits were prepared. Translated news releases were sent to , media outlets. National health ministries and

medical associations were notified, as were fifty-four American ambassadors.

Most of the notice program, however, concentrated on twenty-four countries. No paid advertising occurred outside of the United States. As a result,

. The scenario involved an American current claimant who failed to register in a

timely way, thus becoming a “late registrant.” These late registrants were eligible for compensation from the ongoing claimant fund, as long as all eligible ongoing claimants for the year

had been paid. Therefore, ongoing claimants in future years might find fewer assets available

to pay their claims.
Breast Implants: Lindsey v. Dow Corning Corp. 

there was a disparity in funding between American and foreign notice: the

foreign notice program cost several hundred thousand dollars in comparison

to several million spent in the United States.

The notice package consisted of a synopsis, question-and-answer booklet, a -page notice, claims forms, and opt-out form.

The notice for the  revised settlement was sent by first-class mail to

all persons who had registered during the initial claim submission and optout periods, including to those who had earlier opted out. It contained a

synopsis of benefits, a question-and-answer booklet, and a full, -page notice. In addition, Judge Pointer appeared at numerous regional meetings, on

telephone conferences, and on Court TV. Legal assistance hotlines were also

set up.

Approval and Review Process

No formal discovery was conducted. Requested information was informally

supplied to some objectors. Trial-like procedures to develop evidence were

not used at the fairness hearing.

Collusion objections were muted in Silicone Gel. The fairness of the settlement was more seriously contested. The ultimate standard used by the

court to determine if the settlement should be approved was, once again,

whether the settlement was “fair, reasonable, and adequate.”203 Unlike the

opinions in Bowling, Georgine, and Ahearn, the opinion did not list any additional factors that would guide the court’s decision. The opinion was

clearly influenced by the support of class members and by the adequacy of

compensation. On the latter point, the opinion did not examine in any detail the strength of plaintiffs’ cases in relation to the settlement, which had

been cited as an important factor in other cases. Nor did the opinion examine the status of discovery and the maturity of the litigation, which had

also been relevant variables in other cases. Although the court thought that

the settlement was superior to other means of resolving highly complex disputes, it did not specifically list these considerations as relevant variables, as

other courts had done.

In one regard, the court’s analysis was prophetic. Some objectors had

argued strongly that the settlement was inadequate to fund current claims.

The court honestly professed that it did not know whether the settlement

. Silicone Gel,  WL , at *; Silicone Gel,  WL  at * (settlement

is “fair, reasonable, adequate, and in [plaintiffs’] best interest,” and “fair and reasonable” to

defendants).
 Mass Tort Settlement Class Actions

would be adequate to pay the promised levels. Its “guess” was that the settlement was not, and it refused even to “hazard a guess” about whether that

inadequacy would trigger so many opt-outs that renegotiation of the deal

would be impossible.204 These concerns could have supplied good grounds

to reject the settlement outright. Satisfied that the back-end opt-out period

would obviate the problem,205 the court did not.

The most serious challenge to class certification came from foreign

claimants, who questioned the adequacy of the named representatives.206

The issue of class certification was not, however, a focus of the court’s

opinion; it occupied only two paragraphs in the final order. The first paragraph noted that the requirements of Rule (a) “should not be based on

some narrow reading . . . , but on whether the terms of the proposed settlement make fundamentally unfair distinctions among class members or

fail to make distinctions that . . . should have been made.”207 Finding that

the provisions with regard to foreign claimants were (with some modification208) fair, the court overrode the adequacy objection. In the retrospective

light of Amchem, this finding seems incorrect.209

The other paragraph concerned the decision to exclude Australian class

members and Canadian class members from Ontario and Quebec. The

court noted that % of all objections come from these areas, 210 where

many suits had been filed. Since Rules (b)()(A) and (b)()(B) required

the court to consider the individual interest in retaining control of adjudication and the amount of litigation already commenced, the court decided to

exclude these persons from class membership.211

. Silicone Gel,  WL , at *.

. Id. at *–.

. Public Citizen, a public interest group, also argued that class certification was improper, especially for future claimants, but its argument ran for less than one page and cited

no cases. See Comments and Objections of Public Citizen, Inc. as Amicus Curiae, In re Silicone Gel Breast Implants Prods. Liab. Litig., No. CV -P--S (N.D. Ala., filed June

, ) (copy on file with author).

. Silicone Gel,  WL  at *.

. See supra p. , ¶ .

. See supra note –.

. Silicone Gel,  WL , at *.

. The court did, however, allow them to opt in. See supra note .
Breast Implants: Lindsey v. Dow Corning Corp. 

Modifications in Traditional Adversarial Roles

In what is by now a familiar refrain, Silicone Gel presented the lawyers with

a set of serious ethical issues. The case presented numerous problems of simultaneous representation of persons with divergent interests. The first was

the representation of both present and future claimants. Given that the total

pot was limited, class counsel’s decisions to create separate settlement funds

for presently injured and presently healthy claimants, and then to negotiate

an overall settlement amount, forced class counsel to make an allocational

decision about how much money should go into each fund. Obviously, the

two sets of claimants had divergent interests, which made it difficult for one

set of lawyers to represent both sets. Those problems were compounded in

Silicone Gel by other provisions of the settlement that suggested a potential

for a conflict of interest between the two sets of claimants, such as the ability of some current claimants to dip into the fund set aside for future claimants and the differences between present claimants and future claimants

with regard to their back-end opt-out rights. The up-front opt-out right

that claimants were provided helped to alleviate, at least to a degree, these

conflicts. The problem, however, is that an up-front opt-out right is not

always meaningful for a person who is healthy and therefore not yet in the

possession of the best information about which form of recourse is best.

Comparable ethical problems arose in the simultaneous representation of

“near” and “far” future claimants. Since most of the money flowed into the

settlement during the early years, near claimants stood a much better chance

of receiving full compensation than far claimants. The back-end opt-out

right helped to alleviate this problem, but this right assumed that the companies would at a later date still be financially viable. Moreover, the idea of

basing payments on the amount of money in the fund each year made it

likely that persons who submitted claims in different years would experience

different levels of ratcheting and different awards (or different opt-out

rights) that were based entirely on the fortuity of the year in which the

claimant’s disease manifested itself. Yet no effort was made to segregate the

“severely ratcheted” and the “less severely ratcheted,” or to determine if the

settlement was fair to both groups.

Other conflicts existed as well. Most significantly, class members’ claims

for consortium were eliminated. No named plaintiff asserted such a claim,

and these members were not entitled to opt out if the class member from

whom their claim derived remained in the case.

Two other, related conflicts existed: the conflict between foreign and

U.S. claimants, and the conflict between persons whose state law was favor-
 Mass Tort Settlement Class Actions

able to plaintiffs and persons whose state law was less favorable. The allocational decisions made by class counsel—to limit recovery for foreign claimants to % of all funds (when they represented as much as % of the class)

and the decision to pay all claimants from the United States equally regardless of the law that applied to them—suggest a primary loyalty to the hypothetical “average American” class member, rather than to individuals within

the class.

These concerns were compounded in the case by the lack of information

about numbers of claims, appropriate levels of compensation, or causal

connection. The case was immature, and, while the numbers that were put

up on the grid looked good, the lawyers had no real sense of the dimension

of the problem or of the overwhelming response of the class they represented. The efforts to settle early failed, and a much less lucrative and much

less comprehensive settlement has been put in its place. A large part of the

case is likely to be tied up in bankruptcy for years. Whether the interests of

the class were effectively represented by lawyers seeking an early global solution is a central issue in this litigation.

Assessment

It is easy to suggest that many of the problems of the original settlement in

Silicone Gel relate to its immature status and the lack of good information

about claim numbers, settlement values, and science.212 But other features

might also have played a role. One was the lack of a formal fairness hearing

in which some of these problems might have been aired. Another was a lack

of subclasses or of a guardian ad litem who might have exposed some of the

inherent weaknesses of a class action that was asked to resolve too much.

The central players in the litigation wished to bring the matter to a close,

perhaps overlooking the signals that it would not work and the significant

internal conflicts within the class. Perhaps if the case had slowed down a

bit, as Georgine and Ahearn did, to take a hard look at fairness, legal, and

ethical implications, a different result might have occurred. Perhaps not. In

any event, Silicone Gel stretched the mass tort settlement class action device

a little farther than the prior cases, and this time it broke.

But there is also a second and less well-publicized dimension to Silicone

Gel: the approval of the revised settlement. This settlement performed a

measure of damage control, and was widely accepted by class members.

. Indeed, that suggestion has been made. See Coffee, supra note , at .
Breast Implants: Lindsey v. Dow Corning Corp. 

Nonetheless, in my estimation it had two flaws. One was procedural: The

court’s decision to approve as within its “reserved general supervisory powers” a settlement to which no class counsel or representative plaintiff had

agreed. Although the court was arguably correct in its statement that it retained general supervisory powers under the first settlement to approve a

revised settlement without consent and without another hearing, and although it solicited the views of class members with regard to the revised

settlement, the differences in the two settlements suggest that a formal

hearing might have been advisable. The other flaw was substantive: The

original settlement’s promise of generous payouts had been replaced by a

somewhat stingier compensation system. These flaws suggest that, at least in

some circumstances, defendants may benefit when expectations raised by

the original settlement are later dashed. This suggests courts and counsel

should hesitate before approving a class-wide settlement at risk for failure.


Infected Blood: Walker v. Bayer

Corp.

Introduction213

Prior to the initiation of better procedures for blood screening in , the

American blood supply had become contaminated by the human immunodeficiency virus (HIV). This contamination posed particular risks to persons with hemophilia, many of whom relied on “factors”—blood proteins

that had been concentrated from the blood plasma of many donors by

blood product manufacturers known as “fractionators.” Before the blood

supply was rendered fairly safe in , approximately % to % of

Americans with more severe forms of hemophilia had been infected with

the virus. In turn, they unknowingly passed the virus on to spouses and lovers, and then on to their children. Many of those infected have died of

AIDS and AIDS-related causes; many others still survive. Although the exact number of infected persons is unknown, it is believed to be as many as

, individuals.

The Judicial Panel on Multidistrict Litigation ordered all federal hemophilia cases (approximately ) to be consolidated in the Northern District

of Illinois for pretrial purposes in . Judge John Grady was the transferee

judge. By the time of the final approval of the settlement, tag-along cases

had ballooned that number to more than .

One of the consolidated cases, Wadleigh v. Rhone-Poulenc Rorer, had

been filed as a litigation class action on behalf of all infected persons with

hemophilia, living or deceased, in the United States. On November , ,

. With the exception of clarifying footnotes and citations for direct quotations, no

footnotes or other citations to record sources will be used in this case study. Persons interested in the sources for the factual assertions made in this case study should refer to Tidmarsh, supra note , at –.
 Mass Tort Settlement Class Actions

Judge Grady certified a Rule (b)() class in the case.214 The fractionator

defendants immediately filed a petition for a writ of mandamus, and in a

highly publicized decision, the Seventh Circuit granted the writ on March

, .

215

In August , hemophilia litigation was still a relatively immature tort.

There had been only fifteen verdicts and a handful of appellate decisions.

Consistent with the standard pattern of growth to maturity, most of these

cases had gone the defendants’ way, and the plaintiffs were in the process of

adjusting strategies and developing alternate theories in order to break

through to the second stage. On the other hand, the litigation was not entirely immature; the  to  settlements provided some basis for determining the value of individual claims, and the MDL proceedings had developed extensive discovery materials.

History of the Lawsuit

On August , , plaintiffs filed Walker v. Bayer Corp., and moved for

certification as a class action for settlement purposes. The Walker complaint

was substantially identical to the Wadleigh complaint. Only one plaintiff—Susan Walker—was named as a class representative. She was a spouse

of a person with hemophilia who had died of AIDS. She had not herself

been infected with the virus. The class that Ms. Walker was alleged to represent consisted of all persons with hemophilia that () had used the defendants’ factor concentrates between  and , () had become infected

with HIV, and () were citizens or permanent residents of the United

States. Also included in the class were () spouses, monogamous or cohabiting partners of at least two consecutive years, and children who were infected with HIV; () all persons with derivative claims for emotional distress, loss of consortium, loss of love and support, or fear of AIDS; () parents or guardians of minors or incompetent class members; and () the estates and executors, administrators, or representatives of deceased class

members. It was not a requirement of class membership that a person have

AIDS, or that deceased class members have died of AIDS or AIDS complications. No subclasses were established.

On August , without reference to the Seventh Circuit’s  opinion,

Judge Grady entered an order preliminarily approving the settlement, certi-

. Wadleigh v. Rhone-Poulenc Rorer, Inc.,  F.R.D.  (N.D. Ill. ).

. In re Rhone-Poulenc Rorer, Inc.,  F.d  (th Cir.), cert. denied,  S. Ct. 

().
Infected Blood: Walker v. Bayer Corp. 

fying the class under Rule (b)(), approving the notice plan, and establishing dates for the fairness hearing.216 Judge Grady subsequently appointed a guardian ad litem to represent the  minors who were part of

the class. Approximately  persons opted out of the class.

The fairness hearing itself lasted one day. The court heard from lawyers,

from individuals who supported the settlement, and from individuals who

opposed the settlement. Direct and cross-examination of witnesses was not

used; formal rules of evidence were not observed. No experts testified.

When some counsel alleged that intervening discovery had strengthened

the plaintiffs’ claims, the court ordered a second fairness hearing to be held

on May , . This hearing again consisted of presentations from the lawyers involved, from other members of the plaintiffs’ steering committee,

from other attorneys representing class members, and from class members

themselves. Once again, trial-like procedures were not employed.

On May , , about six weeks before the Supreme Court’s decision in

Amchem, the court affirmed its decision to certify a Rule (b)() class, held

that the notice given to class members was accurate and “the best notice

practicable under the circumstances,” and, after examining various objections to the settlement, approved the settlement as “fair and reasonable.”217

On June , , eighteen objectors to the settlement filed an appeal

from the order approving the settlement. On July , , the appeal was

dismissed in return for an agreement from the fractionator defendants to

permit the objectors to opt out. The settlement is therefore now final, and

the process of compensating class members is nearing completion.

Settlement Terms

In some ways, the settlement was the most straightforward of the five under

study. The basic idea was this: Each case of HIV infection received a flat

, payment, exclusive of attorneys’ fees or costs. There were no caps

on the numbers of people who could claim, no cap on the total amount of

the settlement, and no “ratcheting down” of benefits in the event that more

persons than expected filed claims.

. Pretrial Order No. , In re Factor VIII or IX Concentrate Blood Prods. Litig., No.

-C- (N.D. Ill., Aug. , ) (copy on file with author).

. Final Order and Judgment Relating to Settlement, In re Factor VIII or IX Concentrate Blood Prods. Litig., No. -C- (N.D. Ill., May , ) [hereinafter Final Order]

(copy on file with author).
 Mass Tort Settlement Class Actions

There were, however, some complicating provisions. Perhaps the most

important was the limitation that the , compensation award was

tied to an HIV infection, so that , would be paid for each such infection regardless of the number of persons who might make derivative

claims as a result of this infection. Some examples illustrate the concept: ()

If an infected person with hemophilia had no spouse, lover, children, or

parents, he would be entitled to ,; () If an infected person with

hemophilia had a spouse whom he infected, but neither had children or

parents, husband and wife would collectively be entitled to , for the

husband’s infection, and another , for the wife’s infection; () If an

infected person with hemophilia had an uninfected spouse and children,

and also had parents with viable derivative claims, the entire group (husband, wife, children, and parents) would be entitled to , in total

(not each); and () If an infected person with hemophilia had an infected

spouse, but children and parents of each spouse were uninfected and had

only derivative claims, the husband, wife, children, and husband’s parents

were collectively entitled to one payment of ,, and the wife, husband, children, and wife’s parents were entitled to a separate payment of

,.

Each unit of persons able to claim , for an HIV infection was

referred to in the settlement as a “claimant group.” In order to be entitled to

,, each member of the claimant group needed to file a claim; if one

or more members did not, then no one in the group would be entitled to

receive any compensation.218

Another important provision of the settlement concerned the submission

of claims. All claims for compensation were required to be submitted by

October , , just two months after the complaint was filed. All requests

for exclusion (opt outs) were due the same day. Those who neither filed a

claim nor requested exclusion were barred from asserting any fubther claims

against the defendants. The decision of one member of a claimant group to

opt out did not have the effect of opting out the entire group; if one member of the group opted out and the others did not, the remaining members’

claims were barred.

. Using the fourth hypothetical above, if the husband, wife, children, and husband’s

parents all agreed to the settlement, they would receive , for the husband’s infection;

but if the wife, husband, and children agreed and wife’s parents did not agree, the wife, husband, and children would not be able to receive any compensation for the wife’s claim. If the

wife’s parents did not agree to the settlement, the only options for the remaining claimants

on the wife’s claim were either to opt out or to permit their claims to be barred.
Infected Blood: Walker v. Bayer Corp. 

The method by which claims were to be paid was unique. The settlement agreement called for a settlement administrator that received the

claims and collected the necessary information in support of the claim. But

decisions about whether individual claims were meritorious were to be

made jointly by class counsel and the defendants. When all agreed to allow

a claim, the settlement administrator paid the claim. When all agreed to

disallow the claim, the administrator could not pay the claim, but the disallowed claimant was entitled to have the matter heard, and a decision

about allowance made, by a special master appointed for the purpose of resolving claims. In the event that class counsel and defendants disagreed

about entitlement to payment, the same recourse to the special master was

available to the defendants. Disallowance of claims by the special master did

not leave claimants without recourse; rather, claimants were no longer

deemed to be class members, and were entitled to pursue their claim against

the defendants in litigation.

Each defendant also reserved the right to withdraw in the event that too

many class members opted out.

The most significant other provision of the settlement was the establishment of a  million fund from which all expenses and attorneys’ fees

were to be paid. In addition to attorneys’ fees and expenses, this fund covered costs of notice, costs of the guardian ad litem, and fees of the settlement administrator and special master. Attorneys’ fees for the rendering of

individual advice about whether to opt out were not compensable from the

fund. The defendants reserved the right to object to payments of costs and

fees from the fund, and to seek return of any unexpended portions. But this

was a one-way ratchet; the agreement made perfectly clear that the absolute

maximum payable from the fund would be  million.

Handling of Future Claimants

The class consisted of both presently injured and future claimants. The settlement made no special provisions for the handling of future claimants. In

the context of this litigation, future claimants were those class members infected with HIV but presently asymptomatic (“present futures”), or spouses,

lovers, or children not yet exposed to HIV (“future futures”).219 Since the

class consisted only of those already infected with HIV, “future futures”

. For definitions of future claimants, “present futures,” and “future futures,” see supra

note  and accompanying text.
 Mass Tort Settlement Class Actions

were protected by being excluded from the class. “Present futures” received

no special protections, although the settlement’s tying of compensation to

the fact of HIV infection and the lack of augmented payments for injuries

resulting from infection (such as AIDS) made such protections unnecessary.

Notice Procedure

Notice by first-class mail was sent to all persons that could be reasonably

identified as class members. In order to generate the mailing list, plaintiffs’

and defendants’ attorneys pooled names of known plaintiffs in litigation

around the country. The National Hemophilia Foundation, a defendant in

the MDL litigation, also agreed to mail notice to every person on its mailing list.

Second, a summary notice was published on three separate days (August

, September , and September , ) in USA Today. Although no other

newspaper advertising occurred, the parties provided informational material

to television, radio, and newspapers around the country, and also put information about the settlement on PR Newswire.

Third, information about the settlement was posted on various Internet

sites that might be monitored by persons with hemophilia. Next, information was supplied to other hemophilia-related public interest groups. Finally, a toll-free phone number was established.

Approval and Review Process

Nearly all of the objections to the settlement were of a legal nature or based

on an appeal to a sense of justice. Little discovery was therefore required.

The docket sheet does not reflect that any discovery was undertaken. At the

second fairness hearing, the court asked for information relevant to the allegedly overlooked legal theory, but the information the court sought was

generally available in documents or depositions. The fairness hearings did

not employ adversarial procedures. No experts, other than a claims administrator, appeared.

No claims concerning collusion were made, but the court nonetheless

inquired into the issue as a part of its examination of the settlement’s fairness. The court relied for its finding about the absence of collusion on the

competence of counsel, the vigor of their representation of their clients, the
Infected Blood: Walker v. Bayer Corp. 

court’s personal observations during the MDL proceedings, and the “virtually unanimous support of plaintiffs’ counsel for the settlement.”220

The legal standard under which the court reviewed the settlement is the

now-familiar “fair and reasonable” standard.221 To assist in this determination, the opinion used the five-factor test of Gautreaux v. Pierce.

222 The five

factors were () the strength of the plaintiffs’ case on the merits; () the stage

of the proceedings and the amount of discovery completed; () the complexity, length, and expenses of continued proceedings; () the absence of

collusion and the opinion of competent counsel; and () the degree of opposition to the settlement.223

The court’s August , , order certifying a settlement class was very

brief.224 Without reference to Rule (a) or (b), and without reference to or

attempted distinction of the Seventh Circuit’s decision, the court ordered

certification of a settlement class remarkably similar to the litigation class

that the Seventh Circuit had ordered decertified. The order made no inquiry into adequacy of the class representative or of counsel. Indeed, it did

not even indicate whether the class was being certified under Rule (b)(),

although later parts of the order made that fact clear. The court’s Final Order was no more helpful, stating only that “on August , , this court

certified a Settlement Class”225 and that “the Settlement Agreement . . . is in

accordance with Rule .”226 No reference was made to the reasons for the

order, to Rhone-Poulenc Rorer, or to the pending Amchem case.

Given these limitations, it is impossible to analyze the consistency of this

class certification with Amchem.

. Final Order, supra note , at .

. See id. at .

.  F.d  (th Cir. ).

. Final Order, supra note , at –.

. In fairness to the court, such an analysis had to some extent been performed in the

prior class-action opinions in Wadleigh,  F.R.D. , and Rhone-Poulenc Rorer,  F.d

. Indeed, in Rhone-Poulenc Rorer, the Seventh Circuit opined that the maximum value of

the plaintiffs’ cases may not have exceeded  million.  F.d at . To the extent that

the court was writing its opinion for the participants in the litigation, rather than for the

public, the brevity of the analysis is understandable. These were issues with which the parties

were intimately familiar. Nonetheless, in light of the Seventh Circuit’s rejection of that decision, some discussion of the reasons for certification might have been expected.

. Final Order, supra note , at .

. Id. at .
 Mass Tort Settlement Class Actions

Modifications in Traditional Adversarial Roles

The settlement agreement may have created two conflicts of interest for the

class counsel. The first relates to the representation of persons with potentially conflicting interests. Under the settlement, all infected persons with

hemophilia were treated the same. It should be obvious that the interests of

class members with HIV, members whose injury had converted into AIDS,

deceased members, and incompetent members might vary greatly; in our

legal system, each type of member would likely receive a different level of

compensation. Similarly, the interests of those with derivative claims might

differ from those with direct claims—derivative claimants might desire independent compensation. Conversely, direct claimants with family members might feel less well compensated than those without family members.

Likewise, those with significant subrogation issues or eligibility issues had

interests in parts of the settlement that those without such issues did not;

those without such issues would presumably have been willing to sacrifice

such concerns in return for higher payments.

Seeking to tie compensation to the fact of HIV infection did not remove

these conflicts for counsel. Counsel owed clients a duty of vigorous representation on their legal claims, and the fact of infection is not the relevant

legal variable—injury is. It is undeniable that different class members were

injured in different ways, and that different state laws further fractionalized

the class members.

Nor did the opt-out right entirely eliminate such conflicts. A single objecting member of a claimant group could destroy the desire of remaining

members (including the HIV-infected person) to receive a settlement

award. In this situation, the settlement potentially sacrificed the interests of

group members wishing to accept the settlement, forcing them either to opt

out or to see their claims fail. Counsel cannot simultaneously represent the

interests of those who want to accept the settlement and those who do not.

A second set of ethical dilemmas arose in the context of the dispute

resolution procedure, in which class counsel now acted as judge in his or

her client’s claim. It is doubtful that a lawyer vigorously representing a client can ethically agree, without the client’s consent, to disallow the client’s

claim, yet that is precisely the dilemma into which the settlement agreement

placed class counsel. Unless the class counsel is merely to rubber-stamp all

claims (which is likely a breach of their good faith contractual obligations),

the class counsel will invariably have conflicting responsibilities as the distribution plan proceeds.
Infected Blood: Walker v. Bayer Corp. 

Neither of these sets of ethical issues was raised at the fairness hearing,

and no special representation was provided to reduce these conflicts.

Assessment

Once again, the class-action device seems to have brought about a settlement that was unlikely to have been achieved in individual cases. It brought

a measure of compensation and closure to thousands of innocent persons

who had received very little satisfaction in the tort system. At the same time,

it brought a measure of peace to defendants that individual litigation would

have purchased only after many expensive years. At the substantive level,

therefore, it is difficult to criticize the settlement. But some potential weaknesses remain.

The first is whether the settlement was as generous as it appeared to be.

Certainly the defendants had been successful in litigation up to that time,

but some chinks in their armor were beginning to appear. A  million state

court verdict had recently been entered, and the companies had been willing to settle their Japanese claims for more than twice the amount that they

paid for the American claims.227 Whether the class action should be settled

just as the litigation appeared poised to move into the second stage of maturity and just as the value of the plaintiffs’ claims appeared to be on the rise

highlights a difficult issue about whether settlement class actions should be

permitted in immature mass torts. On the other hand, because of statutes of

limitations issues and other defenses, few new claims were being generated;

whether the litigation would have ever achieved a significantly more mature

status is unclear.

The level of published notice (three days in a single national circulation

newspaper) was below the level of published notice in other cases. But the

community of persons with hemophilia had galvanized around this issue

and was highly networked. It is unlikely that the fact of the settlement escaped the attention of most persons with hemophilia, although it is less cer-

. In March , the Japanese subsidiaries of the fractionator defendants agreed to

settle approximately  claims of Japanese citizens with hemophilia for , apiece, plus

a stipend for medical care of , per month. Approximately half of that money came from

the Japanese government, which, along with the defendants, publicly admitted responsibility

for the infections. I am not familiar enough with Japanese law or culture, or with the facts of

the Japanese litigation, to know whether this differential in payment was justified. The Japanese settlement was not mentioned in the opinions in the Walker case as one of the objecting

class members’ grounds for dissatisfaction.
 Mass Tort Settlement Class Actions

tain that it reached representatives of deceased class members’ estates. The

use of the Internet for notice is a development that is likely to become increasingly common.

Again, significant issues of potential conflicts of interest existed. A single

class representative could not represent the entire range of injuries and interests. Subclasses should probably have been formed; at a minimum, more

class representatives should have been selected.

Class counsel should not have agreed to sit in judgment on the allowance

of individual claims. Although complex litigation often requires adjustments to traditional ethical norms, the expectation that counsel be both

advocate and judge overshoots by some measure the appropriate bounds of

any reasonably defensible “complex litigation” ethic.

Most of these concerns with the settlement are, of course, procedural

rather than substantive. The need to deliver some measure of justice to a

long-suffering class was patent. But this substantively appealing settlement

did not include certain procedural protections for class members with disparate interests. At base, therefore, Factor VIII or IX forces us to consider

which set of values is most critical in mass tort settlement class actions: procedural justice or substantive justice.
The Federal Judicial Center

Board

The Chief Justice of the United States, Chair

Judge Stanley Marcus, U.S. Court of Appeals for the Eleventh Circuit

Judge Bruce M. Selya, U.S. Court of Appeals for the First Circuit

Chief Judge Jean C. Hamilton, U.S. District Court for the Eastern District of Missouri

Judge Thomas F. Hogan, U.S. District Court for the District of Columbia

Chief Judge Richard P. Matsch, U.S. District Court for the District of Colorado

Chief Judge A. Thomas Small, U.S. Bankruptcy Court for the Eastern District of North Carolina

Magistrate Judge Virginia M. Morgan, U.S. District Court for the Eastern District of Michigan

Leonidas Ralph Mecham, Director of the Administrative Office of the U.S. Courts

Director

Judge Rya W. Zobel

Deputy Director

Russell R. Wheeler

Division Directors

Charles S. Arberg, Judicial Education Division (acting)

James B. Eaglin, Research Division

Emily Z. Huebner, Court Education Division

Sylvan A. Sobel, Publications & Media Division
About the Federal Judicial Center

The Federal Judicial Center is the research, education, and planning agency of the federal judicial system. It was established by Congress in  ( U.S.C. §§ –), on the recommendation of the

Judicial Conference of the United States.

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director of the Administrative Office of the U.S. Courts and seven judges elected by the Judicial Conference.

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