Source: https://m.openjurist.org/521/us/591
Timestamp: 2019-06-18 02:42:15
Document Index: 790405372

Matched Legal Cases: ['§1332', '§2072', '§11', '§2073', '§2072', '§1797', '§51']

521 US 591 Amchem Products Inc v. Windsor | OpenJurist
521 U.S. 591 - Amchem Products Inc v. Windsor
117 S.Ct. 2231
138 L.Ed.2d 689
AMCHEM PRODUCTS, INC., et al., Petitioners,
George WINDSOR et al.
The Court of Appeals, in a long, heavily detailed opinion by Judge Becker, first noted several challenges by objectors to justiciability, subject-matter jurisdiction, and adequacy of notice. These challenges, the court said, raised "serious concerns.'' Id., at 623. However, the court observed, "the jurisdictional issues in this case would not exist but for the [class action] certification.'' Ibid. Turning to the class-certification issues and finding them dispositive, the Third Circuit declined to decide other questions.
In contrast to mass torts involving a single accident, class members in this case were exposed to different asbestos-containing products, in different ways, over different periods, and for different amounts of time; some suffered no physical injury, others suffered disabling or deadly diseases. See id., at 626, 628. "These factual differences,'' the Third Circuit explained, "translate[d] into significant legal differences.'' Id., at 627. State law governed and varied widely on such critical issues as "viability of [exposure-only] claims [and] availability of causes of action for medical monitoring, increased risk of cancer, and fear of future injury.'' Ibid.14 " [T]he number of uncommon issues in this humongous class action,'' the Third Circuit concluded, ibid., barred a determination, under existing tort law, that common questions predominated, see id., at 630.
The Court of Appeals next found that "serious intra-class conflicts preclude[d] th[e] class from meeting the adequacy of representation requirement'' of Rule 23(a)(4). Ibid. Adverting to, but not resolving charges of attorney conflict of interests, the Third Circuit addressed the question whether the named plaintiffs could adequately advance the interests of all class members. The Court of Appeals acknowledged that the District Court was certainly correct to this extent: ""[T]he members of the class are united in seeking the maximum possible recovery for their asbestos-related claims.''' Ibid. (quoting 157 F.R.D., at 317). "But the settlement does more than simply provide a general recovery fund,'' the Court of Appeals immediately added; " [r]ather, it makes important judgments on how recovery is to be allocated among different kinds of plaintiffs, decisions that necessarily favor some claimants over others.'' 83 F.3d, at 630.
The Third Circuit, after intensive review, ultimately ordered decertification of the class and vacation of the District Court's anti-suit injunction. Id., at 635. Judge Wellford concurred, "fully subscrib[ing] to the decision of Judge Becker that the plaintiffs in this case ha[d] not met the requirements of Rule 23.'' Ibid. He added that in his view, named exposure-only plaintiffs had no standing to pursue the suit in federal court, for their depositions showed that " [t]hey claimed no damages and no present injury.'' Id., at 638.
Furthermore, objectors urge that exposure-only claimants lack standing to sue: Either they have not yet sustained any cognizable injury or, to the extent the complaint states claims and demands relief for emotional distress, enhanced risk of disease, and medical monitoring, the settlement provides no redress. Objectors also argue that exposure-only claimants did not meet the then-current amount-in-controversy requirement (in excess of $50,000) specified for federal-court jurisdiction based upon diversity of citizenship. See 28 U.S.C. §1332(a).
As earlier recounted, see supra, at __, the Third Circuit declined to reach these issues because they "would not exist but for the [class action] certification.'' 83 F.3d, at 623. We agree that " [t]he class certification issues are dispositive,'' ibid.; because their resolution here is logically antecedent to the existence of any Article III issues, it is appropriate to reach them first, cf. Arizonans for Official English v. Arizona, 520 U.S. ----, ----, 117 S.Ct. 1055, 1068, 137 L.Ed.2d 170 (1997) (declining to resolve definitively question whether petitioners had standing because mootness issue was dispositive of the case). We therefore follow the path taken by the Court of Appeals, mindful that Rule 23's requirements must be interpreted in keeping with Article III constraints, and with the Rules Enabling Act, which instructs that rules of procedure "shall not abridge, enlarge or modify any substantive right,'' 28 U.S.C. §2072(b). See also Fed. Rule Civ. Proc. 82 ("rules shall not be construed to extend . . . the [subject matter] jurisdiction of the United States district courts'').15
To place this controversy in context, we briefly describe the characteristics of class actions for which the Federal Rules provide. Rule 23, governing federal-court class actions, stems from equity practice and gained its current shape in an innovative 1966 revision. See generally Kaplan, Continuing Work of the Civil Committee: 1966 Amendments of the Federal Rules of Civil Procedure (I), 81 Harv. L.Rev. 356, 375-400 (1967) (hereinafter Kaplan, Continuing Work). Rule 23(a) states four threshold requirements applicable to all class actions: (1) numerosity (a "class [so large] that joinder of all members is impracticable''); (2) commonality ("questions of law or fact common to the class''); (3) typicality (named parties' claims or defenses "are typical . . . of the class''); and (4) adequacy of representation (representatives "will fairly and adequately protect the interests of the class'').
Rule 23(b)(2) permits class actions for declaratory or injunctive relief where "the party opposing the class has acted or refused to act on grounds generally applicable to the class.'' Civil rights cases against parties charged with unlawful, class-based discrimination are prime examples. Adv. Comm. Notes, 28 U.S.C.App., p. 697; see Kaplan, Continuing Work 389 (subdivision (b)(2) "build[s] on experience mainly, but not exclusively, in the civil rights field'').
See also Kaplan, Continuing Work 391 ("Th[e] interest [in individual control] can be high where the stake of each member bulks large and his will and ability to take care of himself are strong; the interest may be no more than theoretic where the individual stake is so small as to make a separate action impracticable.'') (footnote omitted). As the Third Circuit observed in the instant case: "Each plaintiff [in an action involving claims for personal injury and death] has a significant interest in individually controlling the prosecution of [his case]''; each "ha[s] a substantial stake in making individual decisions on whether and when to settle.'' 83 F.3d, at 633.
No class action may be "dismissed or compromised without [court] approval,'' preceded by notice to class members. Fed. Rule Civ. Proc. 23(e). The Advisory Committee's sole comment on this terse final provision of Rule 23 restates the rule's instruction without elaboration: "Subdivision (e) requires approval of the court, after notice, for the dismissal or compromise of any class action.'' Adv. Comm. Notes, 28 U.S.C.App., p. 699.
In GM Trucks, 55 F.3d, at 799-800, and in the instant case, 83 F.3d, at 624-626, the Third Circuit held that a class cannot be certified for settlement when certification for trial would be unwarranted. Other courts have held that settlement obviates or reduces the need to measure a proposed class against the enumerated Rule 23 requirements. See, e.g., In re Asbestos Litigation, 90 F.3d, at 975(C.A.5) ("in settlement class context, common issues arise from the settlement itself'') (citing H. Newberg & A. Conte, 2 Newberg on Class Actions §11.28, at 11-58 (3d ed.1992)); White v. National Football League, 41 F.3d 402, 408 (C.A.8 1994) ("adequacy of class representation . . . is ultimately determined by the settlement itself''), cert. denied, 515 U.S. 1137, 115 S.Ct. 2569, 132 L.Ed.2d 821 (1995); In re A.H. Robins Co., 880 F.2d 709, 740(C.A.4) (" [i]f not a ground for certification per se, certainly settlement should be a factor, and an important factor, to be considered when determining certification''), cert. denied sub nom. Anderson v. Aetna Casualty & Surety Co., 493 U.S. 959, 110 S.Ct. 377, 107 L.Ed.2d 362 (1989); Malchman v. Davis, 761 F.2d 893, 900 (C.A.2 1985) (certification appropriate, in part, because "the interests of the members of the broadened class in the settlement agreement were commonly held''), cert. denied, 475 U.S. 1143, 106 S.Ct. 1798, 90 L.Ed.2d 343 (1986).
Confronted with a request for settlement-only class certification, a district court need not inquire whether the case, if tried, would present intractable management problems, see Fed. Rule Civ. Proc. 23(b)(3)(D), for the proposal is that there be no trial. But 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. Such attention is of vital importance, for a court asked to certify a settlement class will lack the opportunity, present when a case is litigated, to adjust the class, informed by the proceedings as they unfold. See Fed. Rule Civ. Proc. 23(c), (d).16
And, of overriding importance, courts must be mindful that the rule as now composed sets the requirements they are bound to enforce. Federal Rules take effect after an extensive deliberative process involving many reviewers: a Rules Advisory Committee, public commenters, the Judicial Conference, this Court, the Congress. See 28 U.S.C. §§2073, 2074. The text of a rule thus proposed and reviewed limits judicial inventiveness. Courts are not free to amend a rule outside the process Congress ordered, a process properly tuned to the instruction that rules of procedure "shall not abridge . . . any substantive right.'' §2072(b).
Federal courts, in any case, lack authority to substitute for Rule 23's certification criteria a standard never adopted-that if a settlement is "fair,'' then certification is proper. Applying to this case criteria the rulemakers set, we conclude that the Third Circuit's appraisal is essentially correct. Although that court should have acknowledged that settlement is a factor in the calculus, a remand is not warranted on that account. The Court of Appeals' opinion amply demonstrates why-with or without a settlement on the table-the sprawling class the District Court certified does not satisfy Rule 23's requirements.17
* We address first the requirement of Rule 23(b)(3) that " [common] questions of law or fact . . . predominate over any questions affecting only individual members.'' The District Court concluded that predominance was satisfied based on two factors: class members' shared experience of asbestos exposure and their common "interest in receiving prompt and fair compensation for their claims, while minimizing the risks and transaction costs inherent in the asbestos litigation process as it occurs presently in the tort system.'' 157 F.R.D., at 316. The settling parties also contend that the settlement's fairness is a common question, predominating over disparate legal issues that might be pivotal in litigation but become irrelevant under the settlement.
The predominance requirement stated in Rule 23(b)(3), we hold, is not met by the factors on which the District Court relied. The benefits asbestos-exposed persons might gain from the establishment of a grand-scale compensation scheme is a matter fit for legislative consideration, see supra, at __-__, but it is not pertinent to the predominance inquiry. That inquiry trains on the legal or factual questions that qualify each class member's case as a genuine controversy, questions that preexist any settlement.18
The Rule 23(b)(3) predominance inquiry tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation. See 7A Wright, Miller, & Kane 518-519.19 The inquiry appropriate under Rule 23(e), on the other hand, protects unnamed class members "from unjust or unfair settlements affecting their rights when the representatives become fainthearted before the action is adjudicated or are able to secure satisfaction of their individual claims by a compromise.'' See 7B Wright, Miller, & Kane §1797, at 340-341. But it is not the mission of Rule 23(e) to assure the class cohesion that legitimizes representative action in the first place. If a common interest in a fair compromise could satisfy the predominance requirement of Rule 23(b)(3), that vital prescription would be stripped of any meaning in the settlement context.
"The [exposure-only] plaintiffs especially share little in common, either with each other or with the presently injured class members. It is unclear whether they will contract asbestos-related disease and, if so, what disease each will suffer. They will also incur different medical expenses because their monitoring and treatment will depend on singular circumstances and individual medical histories.'' Id., at 626.
No settlement class called to our attention is as sprawling as this one. Cf. In re Asbestos Litigation, 90 F.3d, at 976, n. 8 ("We would likely agree with the Third Circuit that a class action requesting individual damages for members of a global class of asbestos claimants would not satisfy [Rule 23] requirements due to the huge number of individuals and their varying medical expenses, smoking histories, and family situations.''). Predominance is a test readily met in certain cases alleging consumer or securities fraud or violations of the antitrust laws. See Adv. Comm. Notes, 28 U.S.C.App., p. 697; see also supra, at __. Even mass tort cases arising from a common cause or disaster may, depending upon the circumstances, satisfy the predominance requirement. The Advisory Committee for the 1966 revision of Rule 23, it is true, noted that "mass accident'' cases are likely to present "significant questions, not only of damages but of liability and defenses of liability, . . . affecting the individuals in different ways.'' Ibid. And the Committee advised that such cases are "ordinarily not appropriate'' for class treatment. Ibid. But the text of the rule does not categorically exclude mass tort cases from class certification, and district courts, since the late 1970s, have been certifying such cases in increasing number. See Resnik, From "Cases'' to "Litigation,'' 54 Law & Contemp.Prob. 5, 17-19 (Summer 1991) (describing trend). The Committee's warning, however, continues to call for caution when individual stakes are high and disparities among class members great. As the Third Circuit's opinion makes plain, the certification in this case does not follow the counsel of caution. That certification cannot be upheld, for it rests on a conception of Rule 23(b)(3)'s predominance requirement irreconcilable with the rule's design.
Nor can the class approved by the District Court satisfy Rule 23(a)(4)'s requirement that the named parties "will fairly and adequately protect the interests of the class.'' The adequacy inquiry under Rule 23(a)(4) serves to uncover conflicts of interest between named parties and the class they seek to represent. See General Telephone Co. of Southwest v. Falcon, 457 U.S. 147, 157-158, n. 13, 102 S.Ct. 2364, 2370-2371, n. 13, 72 L.Ed.2d 740 (1982). " [A] class representative must be part of the class and "possess the same interest and suffer the same injury' as the class members.'' East Tex. Motor Freight System, Inc. v. Rodriguez, 431 U.S. 395, 403, 97 S.Ct. 1891, 1896, 52 L.Ed.2d 453 (1977) (quoting Schlesinger v. Reservists Comm. to Stop the War, 418 U.S. 208, 216, 94 S.Ct. 2925, 2930, 41 L.Ed.2d 706 (1974)).20
" [W]here differences among members of a class are such that subclasses must be established, we know of no authority that permits a court to approve a settlement without creating subclasses on the basis of consents by members of a unitary class, some of whom happen to be members of the distinct subgroups. The class representatives may well have thought that the Settlement serves the aggregate interests of the entire class. But the adversity among subgroups requires that the members of each subgroup cannot be bound to a settlement except by consents given by those who understand that their role is to represent solely the members of their respective subgroups.'' In re Joint Eastern and Southern Dist. Asbestos Litigation, 982 F.2d 721, 742-743 (C.A.2 1992), modified on reh'g sub nom. In re Findley, 993 F.2d 7 (C.A.2 1993).
The argument is sensibly made that a nationwide administrative claims processing regime would provide the most secure, fair, and efficient means of compensating victims of asbestos exposure.21 Congress, however, has not adopted such a solution. And Rule 23, which must be interpreted with fidelity to the Rules Enabling Act and applied with the interests of absent class members in close view, cannot carry the large load CCR, class counsel, and the District Court heaped upon it. As this case exemplifies, the rulemakers' prescriptions for class actions may be endangered by "those who embrace [Rule 23] too enthusiastically just as [they are by] those who approach [the rule] with distaste.'' C. Wright, Law of Federal Courts 508 (5th ed.1994); cf. 83 F.3d, at 634 (suggesting resort to less bold aggregation techniques, including more narrowly defined class certifications).
* First, I believe the majority understates the importance of settlement in this case. Between 13 and 21 million workers have been exposed to asbestos in the workplace-over the past 40 or 50 years-but the most severe instances of such exposure probably occurred three or four decades ago. See Report of The Judicial Conference Ad Hoc Committee on Asbestos Litigation, pp. 6-7 (Mar.1991) (Judicial Conference Report); App. 781-782, 801; B. Castleman, Asbestos: Medical and Legal Aspects 787-788 (4th ed.1996). This exposure has led to several hundred thousand lawsuits, about 15% of which involved claims for cancer and about 30% for asbestosis. See In re Joint Eastern and Southern Dist. Asbestos Litigation, 129 B.R. 710, 936-937 (E. and S.D.N.Y.1991) (Joint Litigation). About half of the suits have involved claims for pleural thickening and plaques-the harmfulness of which is apparently controversial. (One expert below testified that they "don't transform into cancer'' and are not "predictor[s] of future disease,'' App. 781.) Some of those who suffer from the most serious injuries, however, have received little or no compensation. In re School Asbestos Litigation, 789 F.2d 996, 1000 (C.A.3 1986); see also Edley & Weiler, Asbestos: A Multi-Billion-Dollar Crisis, 30 Harv. J. Legis. 383, 384, 393 (1993) (" [U]p to one-half of asbestos claims are now being filed by people who have little or no physical impairment. Many of these claims produce substantial payments (and substantial costs) even though the individual litigants will never become impaired''). These lawsuits have taken up more than 6% of all federal civil filings in one recent year, and are subject to a delay that is twice that of other civil suits. Judicial Conference Report 7, 10-11.
Delays, high costs, and a random pattern of noncompensation led the Judicial Conference Ad Hoc Committee on Asbestos Litigation to transfer all federal asbestos personal-injury cases to the Eastern District of Pennsylvania in an effort to bring about a fair and comprehensive settlement. It is worth considering a few of the Committee's comments. See Judicial Conference Report 2 (""Decisions concerning thousands of deaths, millions of injuries, and billions of dollars are entangled in a litigation system whose strengths have increasingly been overshadowed by its weaknesses.' The ensuing five years have seen the picture worsen: increased filings, larger backlogs, higher costs, more bankruptcies and poorer prospects that judgments-if ever obtained-can be collected''') (quoting Rand Corporation Institute for Civil Justice); id., at 13 ("The transaction costs associated with asbestos litigation are an unconscionable burden on the victims of asbestos disease,'' and citing Rand finding that "of each asbestos litigation dollar, 61 cents is consumed in transaction costs . . . . Only 39 cents were paid to the asbestos victims''); id., at 12 ("Delays also can increase transaction costs, especially the attorneys' fees paid by defendants at hourly rates. These costs reduce either the insurance fund or the company's assets, thereby reducing the funds available to pay pending and future claimants. By the end of the trial phase in [one case], at least seven defendants had declared bankruptcy (as a result of asbestos claims generally)''); see also J. Weinstein, Individual Justice in Mass Tort Litigation 155 (1995); Edley & Weiler, supra, at __-__.
The District Court, when approving the settlement, concluded that it improved the plaintiffs' chances of compensation and reduced total legal fees and other transaction costs by a significant amount. Under the previous system, according to the court, " [t]he sickest of victims often go uncompensated for years while valuable funds go to others who remain unimpaired by their mild asbestos disease.'' Ibid. The court believed the settlement would create a compensation system that would make more money available for plaintiffs who later develop serious illnesses.
These differences might warrant subclasses, though subclasses can have problems of their own. "There can be a cost in creating more distinct subgroups, each with its own representation . . . . [T]he more subclasses created, the more severe conflicts bubble to the surface and inhibit settlement . . . . The resources of defendants and, ultimately, the community must not be exhausted by protracted litigation.'' Weinstein, Individual Justice in Mass Tort Litigation, at 66. Or these differences may be too serious to permit an effort at group settlement. This kind of determination, as I have said, is one that the law commits to the discretion of the district court-reviewable for abuse of discretion by a court of appeals. I believe that we are far too distant from the litigation itself to reweigh the fact-specific Rule 23 determinations and to find them erroneous without the benefit of the Court of Appeals first having restudied the matter with today's legal standard in mind.
Further, certain details of the settlement that are not discussed in the majority opinion suggest that the settlement may be of greater benefit to future plaintiffs than the majority suggests. The District Court concluded that future plaintiffs receive a "significant value'' from the settlement due to variety of its items that benefit future plaintiffs, such as: (1) tolling the statute of limitations so that class members "will no longer be forced to file premature lawsuits or risk their claims being time-barred''; (2) waiver of defenses to liability; (3) payment of claims, if and when members become sick, pursuant to the settlement's compensation standards, which avoids "the uncertainties, long delays and high transaction costs [including attorney's fees] of the tort system''; (4) "some assurance that there will be funds available if and when they get sick,'' based on the finding that each defendant "has shown an ability to fund the payment of all qualifying claims'' under the settlement; and (5) the right to additional compensation if cancer develops (many settlements for plaintiffs with noncancerous conditions bar such additional claims). 157 F.R.D., at 292. For these reasons, and others, the District Court found that the distinction between present and future plaintiffs was "illusory.'' 157 F.R.D., at 317-318.
I do not know whether or not the benefits are more or less valuable than an inflation adjustment. But I can certainly recognize an argument that they are. —(To choose one more brief illustration, the majority chastises the settlement for extinguishing loss-of-consortium claims, ante, at __, __, but does not note that, as the District Court found, the "defendants' historical [settlement] averages, upon which the compensation values are based, include payments for loss of consortium claims, and, accordingly, the Compensation Schedule is not unfair for this ascribed reason,'' 157 F.R.D., at 278.) The difficulties inherent in both knowing and understanding the vast number of relevant individual fact-based determinations here counsel heavily in favor of deference to district court decisionmaking in Rule 23 decisions. Or, at the least, making certain that appellate court review has taken place with the correct standard in mind.
Fourth, I am more agnostic than is the majority about the basic fairness of the settlement. Ante, at __-__. The District Court's conclusions rested upon complicated factual findings that are not easily cast aside. It is helpful to consider some of them, such as its determination that the settlement provided "fair compensation . . . while reducing the delays and transaction costs endemic to the asbestos litigation process'' and that "the proposed class action settlement is superior to other available methods for the fair and efficient resolution of the asbestos-related personal injury claims of class members.'' 157 F.R.D., at 316 (citation omitted); see also id., at 335 ("The inadequate tort system has demonstrated that the lawyers are well paid for their services but the victims are not receiving speedy and reasonably inexpensive resolution of their claims. Rather, the victims' recoveries are delayed, excessively reduced by transaction costs and relegated to the impersonal group trials and mass consolidations. The sickest of victims often go uncompensated for years while valuable funds go to others who remain unimpaired by their mild asbestos disease. Indeed, [these] unimpaired victims have, in many states, been forced to assert their claims prematurely or risk giving up all rights to future compensation for any future lung cancer or mesothelioma. The plan which this Court approves today will correct that unfair result for the class members and the . . . defendants''); id., at 279, 280 (settlement "will result in less delay for asbestos claimants than that experienced in the present tort system'' and will "result in the CCR defendants paying more claims, at a faster rate, than they have ever paid before''); id., at 292; Edley & Weiler, 30 Harv. J. Legis., at 405, 407 (finding that " [t]here are several reasons to believe that this settlement secures important gains for both sides'' and that they "firmly endorse the fairness and adequacy of this settlement''). Indeed, the settlement has been endorsed as fair and reasonable by the AFL-CIO (and its Building and Construction Trades Department), which represents a ""substantial percentage''' of class members, 157 F.R.D., at 325, and which has a role in monitoring implementation of the settlement, id., at 285. I do not intend to pass judgment upon the settlement's fairness, but I do believe that these matters would have to be explored in far greater depth before I could reach a conclusion about fairness. And that task, as I have said, is one for the Court of Appeals.
The opinion dissenting in part does not find the class certification issues dispositive-at least not yet, and would return the case to the Third Circuit for a second look. See post, at __, __. If certification issues were genuinely in doubt, however, the jurisdictional issues would loom larger. Concerning objectors' assertions that exposure-only claimants do not satisfy the $50,000 amount-in-controversy and may have no currently ripe claim, see Metro-North Commuter R. Co. v. Buckley, --- U.S. ----, ----, 117 S.Ct. 379, ----, 136 L.Ed.2d 297 (Federal Employers' Liability Act, 35 Stat. 65, as amended, 45 U.S.C. §51 et seq., interpreted in light of common-law principles, does not permit "exposure-only'' railworker to recover for negligent infliction of emotional distress or lump-sum damages for costs of medical monitoring).