Opinion ID: 755571
Heading Depth: 2
Heading Rank: 1

Heading: Settlement-Only Class Certification

Text: Under the Federal Rules of Civil Procedure, a district court generally makes a determination whether to certify a class as soon as practicable after the commencement of an action brought as a class action. Fed.R.Civ.P. 23(c)(1). This certification may be conditional, and may be modified as needed. Id. Although the initial complaint in this case was filed on October 24, 1995, the district court delayed consideration of the certification issue pending the outcome of the Task Force investigation. 38 On October 28, 1996, the district court conditionally certified the proposed class for settlement purposes only. Reviewing the class action device historically, the Supreme Court noted that [a]mong current applications of Rule 23(b)(3), the 'settlement only' class has become a stock device .... all Federal Circuits recognize the utility of Rule 23(b)(3) settlement classes. Amchem Products Inc. v. Windsor, 521 U.S. 591, ----, 117 S.Ct. 2231, 2247, 138 L.Ed.2d 689 (1997) (citations omitted); see also G.M. Trucks, 55 F.3d at 786-800 (examining the arguments for and against the use of settlement classes). But drawing on Judge Edward Becker's comprehensive opinion in Georgine v. Amchem Products, Inc., 83 F.3d 610 (3d Cir.1996), 39 the Amchem Court noted the special problems encountered with settlement classes. Although as a general matter it approved the certification of classes for settlement purposes only, the Supreme Court cautioned that the certification inquiry is still governed by Rule 23(a) and (b), and that [f]ederal courts ... lack authority to substitute for Rule 23's certification criteria a standard never adopted--that if a settlement is 'fair,' then certification is proper. Amchem, 521 U.S. at ---- - ----, 117 S.Ct. at 2248-49. Consequently, a district court must first find a class satisfies the requirements of Rule 23, regardless whether it certifies the class for trial or for settlement. Amchem, 521 U.S. at ----, 117 S.Ct. at 2248 (The safeguards provided by the Rule 23(a) and (b) class-qualifying criteria, we emphasize, are not impractical impediments--shorn of utility--in the settlement class context.); G.M. Trucks, 55 F.3d at 799-800 (In sum, 'a class is a class is a class,' and a settlement class, if it is to qualify under Rule 23, must meet all of its requirements.). The district court may take the proposed settlement into consideration when examining the question of certification. Amchem, at ----, 117 S.Ct. at 2248. 40 In Amchem, the Supreme Court held a district court [determining whether to certify a class for settlement purposes only] need not inquire whether the case, if tried, would present intractable management problems ... for the proposal is that there be no trial. Id. at ----, 117 S.Ct. at 2248. But at the same time the Court noted 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. Id. In particular, the Court emphasized the importance of applying the class certification requirements of Rules 23(a) and (b) separately from its fairness determination under Rule 23(e). The Court noted that [i]f 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. Id. at ---- - ----, 117 S.Ct. at 2249-50. 41 At the same time, the Court stressed the requirements found under Rule 23(a), in particular the stricture that the representative parties will fairly and adequately protect the interests of the class. Indeed, the key to Amchem appears to be the careful inquiry into adequacy of representation. Id. at ----, 117 S.Ct. at 2248 (Subdivisions (a) and (b) [of Rule 23] focus court attention on whether a proposed class has sufficient unity so that absent members can fairly be bound by decisions of class representatives. That dominant concern persists when settlement, rather than trial, is proposed.) With this standard in mind, we will review the district court's analysis of the Rule 23 certification criteria.