OCTOBER TERM, 1996
Syllabus
AMCHEM PRODUCTS, INC., ET AL.
v. WINDSOR ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD
CIRCUIT
No. 96-270. Argued February 18, 1997-Decided June 25, 1997
This case concerns the legitimacy under Rule 23 of the Federal
Rules of Civil Procedure of a class-action certification sought to
achieve global settlement of current and future asbestos-related
claims. Never intending to litigate, the settling
parties-petitioners and the representatives of the plaintiff class
described below-presented to the District Court a class-action
complaint, an answer, a proposed settlement agreement, and a joint
motion for conditional class certification. The complaint
identifies nine lead plaintiffs, designating them and members of
their families as representatives of a class comprised of all
persons who had not previously sued any of the
asbestos-manufacturing companies that are petitioners in this suit,
but who (1) had been exposed-occupationally or through the
occupational exposure of a spouse or household member-to asbestos
attributable to a petitioner, or (2) whose spouse or family member
had been so exposed. Potentially hundreds of thousands, perhaps
millions, of individuals may fit this description. All named
plaintiffs alleged exposure; more than half of them alleged already
manifested physical injuries; the others, so-called "exposure-only"
claimants, alleged that they had not yet manifested any
asbestos-related condition. The complaint delineated no subclasses;
all named plaintiffs were designated as representatives of the
entire class.
The exhaustive agreement,
inter alia, (1) proposed to
settle, and to preclude nearly all class members from litigating,
claims not previously filed against petitioners; (2) detailed an
administrative mechanism and a schedule of payments to compensate
class members who meet defined exposure and medical criteria; (3)
described four categories of compensable cancers and nonmalignant
conditions, and specified the range of damages to be paid
qualifying claimants for each; (4) did not adjust payments for
inflation; (5) capped the number of claims payable annually for
each disease; and (6) denied compensation for family members'
loss-ofconsortium claims, for exposure-only plaintiffs' claims for
emotional distress, enhanced risk of disease, and medical
monitoring, and for "pleural" claims involving lung plaques but no
physical impairment, even if otherwise applicable state law
recognized such claims.
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Syllabus
The District Court approved the settling parties' plan for
giving notice to the class and certified the proposed class for
settlement only. The court found, over numerous challenges raised
by the objectors, that the settlement was fair, the court's
jurisdiction properly invoked, and representation and notice
adequate. Pending the issuance of a final order, the District Court
enjoined class members from separately pursuing asbestos suits in
any federal or state court. The Third Circuit ultimately vacated
the District Court's orders. Although the objectors maintained that
the case was not justiciable and that the exposure-only claimants
lacked standing to sue, the Court of Appeals declined to reach
these issues, reasoning that they would not exist but for the class
certification. The court acknowledged that a class action may be
certified for settlement only, but held that the certification
requirements of Rule 23 must be met as if the case were going to be
litigated, without taking the settlement into account. The court
nevertheless homed in on the settlement's terms in examining
aspects of the case under Rule 23 criteria. The Court of Appeals
explained that certification was inappropriate because the class
failed to satisfy, among other provisions, Rule 23(b)(3)'s
requirement that questions common to the class "predominate over"
other questions, and Rule 23(a)(4)'s adequacy of representation
requirement. The court therefore ordered the class decertified.
Held:
1. The class certification issues are dispositive here in that
their resolution is logically antecedent to the existence of any
Article III issues. This Court therefore declines to resolve
objectors' assertions that no justiciable case or controversy is
presented and that the exposure-only claimants lack standing to
sue. Cf.
Arizonans for Official English v.
Arizona,
520 U. S. 43,
66-67. The Court follows this path mindful that Rule 23's
requirements must be interpreted in keeping with Article III
constraints, and with the Rules Enabling Act's instruction that
procedural rules not abridge, enlarge, or modify any substantive
right. Pp. 612-613.
2. The sprawling class the District Court certified does not
satisfy Rule 23's requirements. Pp. 613-629.
(a) Rule 23 gained its current shape in a 1966 revision. Its
subdivisions (a) and (b) enumerate criteria that must be met for a
class to be certified. Rule 23(b)(3) was the most adventuresome
innovation of the 1966 Amendments, permitting judgments for money
that would bind all class members save those who opt out. To gain
certification under Rule 23(b)(3), a class must satisfy the
requirements of Rule 23(a), among them, that named class
representatives will fairly and adequately protect class interests;
the class must also meet the Rule 23(b)(3) criteria
593
that common questions "predominate over any questions affecting
only individual members" and that class resolution be "superior to
other available methods for the fair and efficient adjudication of
the controversy." To alert Rule 23(b)(3) class members to their
right to "opt out," Rule 23 requires "the best notice practicable
under the circumstances." Rule 23(c)(2). Finally, Rule 23(e)
specifies that a class action cannot be settled without the court's
approval, and that notice of the proposed compromise must be given
to all class members in such manner as the court directs. Pp.
613-619.
(b) Because settlement is relevant to the propriety of class
certification, the Third Circuit's statement that Rule 23(a) and
(b)(3) "must be satisfied without taking into account the
settlement" bears modification. But the Third Circuit did not, in
fact, ignore the settlement. The court homed in on settlement terms
in explaining why it found absentees' interests inadequately
represented. The Third Circuit's inspection of the settlement
agreement in that regard was altogether proper. Whether trial would
present intractable management problems, see Rule 23(b)(3)(D), is
not a consideration when settlement-only certification is
requested, for the proposal is that there be no trial. But other
specifications of the Rule designed to protect absentee class
members by blocking unwarranted or overbroad class definitions are
of vital importance in the settlement context, for the court in
such a case will lack the opportunity to adjust the class as
litigation unfolds. See Rule 23(c) and (d). And, of overriding
importance, courts must be mindful that they are bound to enforce
the Rule as now composed, for Federal Rules may be amended only
through the extensive deliberative process Congress prescribed.
Rule 23(e)'s settlement prescription was designed to function as an
additional requirement, not a superseding direction, to the
class-qualifying criteria of Rule 23(a) and (b). Cf.
Eisen
v.
Carlisle &
Jacquelin, 417 U. S. 156, 176-177.
The dominant concern of Rule 23(a) and (b)-that a proposed class
have sufficient unity so that absentees can fairly be bound by
class representatives' decisions-persists when settlement, rather
than trial, is proposed. Those subdivisions' safeguards provide
practical checks in the settlement context. First, their standards
serve to inhibit class certifications dependent upon the court's
gestalt judgment or overarching impression of the settlement's
fairness. Second, if a Rule 23(e) fairness inquiry controlled
certification, eclipsing Rule 23(a) and (b), and permitting
certification despite the impossibility of litigation, both class
counsel and court would be disarmed. Class counsel confined to
settlement negotiations could not use the threat of litigation to
press for a better offer, and the court would face a bargain
proffered for its approval without benefit of adversarial
investigation. Federal courts, in any case, lack authority to
sub-
594
Syllabus
stitute for Rule 23's certification criteria a standard never
adopted by the rulemakers-that if a settlement is "fair," then
certification is proper. Pp. 619-622.
(c) Rule 23(b)(3)'s predominance requirement is not met by the
factors relied on by the District Court and the settling parties:
class members' shared experience of asbestos exposure; their common
interest in receiving prompt and fair compensation, while
minimizing the risks and transaction costs inherent in the tort
system's asbestos litigation process; and the settlement's
fairness. The benefits asbestosexposed persons might gain from a
grand-scale compensation scheme is a matter fit for legislative
consideration, 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, and tests whether proposed classes are
sufficiently cohesive to warrant adjudication by representation. In
contrast, the Rule 23(e) inquiry protects unnamed class members
from unjust or unfair settlements agreed to by fainthearted or
selfinterested class representatives; the Rule 23(e) prescription
was not designed to assure the class cohesion that legitimizes
representative action in the first place. If a common interest in a
fair compromise could satisfy Rule 23(b)(3)'s predominance
requirement, that vital prescription would be stripped of any
meaning in the settlement context. The predominance criterion is
not satisfied by class members' shared experience of asbestos
exposure, given the greater number of questions peculiar to the
several categories of class members, and to individuals within each
category, and the significance of those uncommon questions. No
settlement class called to the Court's attention is as sprawling as
the one certified here. Although 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 Rule 23 revision advised that such cases are ordinarily
not appropriate for class treatment, and warned district courts to
exercise caution when individual stakes are high and disparities
among class members great. 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. Pp. 622-625.
(d) Nor can the class approved by the District Court satisfy
Rule 23(a)(4)'s adequate representation inquiry. That inquiry
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. Representatives must be part of the class and possess the same
interest and suffer the same injury as the class
595
members.
E. g., East Tex. Motor Freight System, Inc. v.
Rodriguez, 431
U. S. 395, 403. In this case, named parties with diverse
medical conditions sought to act on behalf of a single giant class
rather than on behalf of discrete subclasses. In significant
respects, the interests of those within the single class are not
aligned. Most saliently, for the currently injured, the critical
goal is generous immediate payments. That goal tugs against the
interest of exposure-only plaintiffs in ensuring an ample,
inflation-protected fund for the future. Cf.
General Telephone
Co. of Northwest v.
EEOC, 446 U. S. 318,331. The
disparity between the currently injured and exposure-only
categories of plaintiffs, and the diversity within each category,
are not made insignificant by the District Court's finding that
petitioners' assets suffice to pay settled claims. Although this is
not a Rule 23(b)(I)(B) "limited fund" case, the settlement's
terms--e. g., no inflation adjustments, only a few claimants per
year permitted to opt out at the back end, and loss-of-consortium
claims extinguished-reflect essential allocation decisions designed
to confine compensation and to limit defendants' liability. Thus,
the settling parties achieved a global compromise with no
structural assurance of fair and adequate representation for the
diverse groups and individuals affected. The Third Circuit found no
assurance here that the named parties operated under a proper
understanding of their representational responsibilities. That
assessment is on the mark. Pp. 625-628.
(e) In light of the conclusions that the class does not satisfy
the requirements of common issue predominance and adequacy of
representation, this Court need not rule, definitively, on the
adequacy of the notice given here. The Court recognizes, however,
the gravity of the question whether class-action notice sufficient
under the Constitution and Rule 23 could ever be given to legions
so unselfconscious and amorphous as the class certified by the
District Court. P. 628.
(f) 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. Congress, however, has not adopted such a
solution. 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 the settling
parties and the District Court heaped upon it. Pp.628-629.
83 F.3d
610, affirmed.
GINSBURG, J., delivered the opinion of the Court, in which
REHNQUIST, C. J., and SCALIA, KENNEDY, SOUTER, and THOMAS, JJ.,
joined. BREYER, J., filed an opinion concurring in part and
dissenting in part, in which
596
STEVENS, J., joined,
post, p. 629. O'CONNOR, J., took no
part in the consideration or decision of the case.
Stephen M. Shapiro argued the cause for petitioners.
With him on the briefs were John D. Aldock, Elizabeth Runyan
Geise, Richard M. Wyner, Kenneth S. Geller, Andrew J. Pincus,
Charles A. Rothfeld, Eileen Penner, Robert H. Bork, Max Gitter,
Blake Perkins, and Nancy B. Stone.
Laurence H. Tribe argued the cause and filed a brief for
respondent Windsor et al. With him on the brief were Brian
Koukoutchos, Jonathan S. Massey, Frederick M. Baron, Brent M.
Rosenthal, and Steve Baughman. Brad Seligman, Jocelyn D. Larkin,
Donna M. Ryu, Sharon R. Vinick, and Steven Kazan filed a brief for
respondent Cargile et al. Shepard A. Hoffman filed a brief for
respondent Balonis et al. Ronald L. Motley, Joseph F. Rice, Nancy
Worth Davis, Gene Locks, and Jonathan W Miller filed a brief for
respondent Georgine et al. Brian Wolfman and Alan B. Morrison filed
a brief for respondent White Lung Association of New Jersey et
al.*
*Briefs of
amici curiae urging reversal were filed for
the National Association of Securities and Commercial Lawyers by
Kevin P. Roddy, Clinton A. Krislov, and
Robert J.
Stein III; for the Chamber of Commerce of the United States
by
John H. Beisner, Brian D. Boyle, Stephen A. Bokat, and
Robin S.
Conrad; for Rhone-Poulenc Rorer Inc. et al.
by
Carter G.
Phillips, Richard L. Berkman, and
Fred T. Magaziner; and for the Washington Legal Foundation
by
Daniel J.
Popeo.
Briefs of
amici curiae urging affirmance were filed for
the State of New York et al. by
Dennis C.
Vacco,
Attorney General of New York,
Barbara Gott Billet, Solicitor
General,
Shirley F.
Sarna, Nancy Spiegel, Joy
Feigenbaum, and
Jane M. Kimmel, Assistant Attorneys
General,
Daniel E. Lungren, Attorney General of California,
Thomas F.
Gede, Special Assistant Attorney General,
and
Albert Norman Shelden, Supervising Deputy Attorney
General,
Charles P. C.
Ruff, Corporation Counsel of
the District of Columbia, and by the Attorneys General of their
respective jurisdictions as follows:
Winston Bryant of
Arkansas,
M. Jane Brady of Delaware,
Alan G.
Lance of Idaho,
Carla J.
Stovall of Kansas,
Albert B. Chandler III of Kentucky,
Frank J.
Kelley of Michigan,
Hubert H. Humphrey III of
Minnesota,
Joseph P. Mazurek of Montana,
Frankie Sue Del
Papa of Ne-
597
JUSTICE GINSBURG delivered the opinion of the Court. This case
concerns the legitimacy under Rule 23 of the Federal Rules of Civil
Procedure of a class-action certification sought to achieve global
settlement of current and future asbestos-related claims. The class
proposed for certification potentially encompasses hundreds of
thousands, perhaps millions, of individuals tied together by this
commonality: Each was, or some day may be, adversely affected by
past exposure to asbestos products manufactured by one or more of
20 companies. Those companies, defendants in the lower courts, are
petitioners here.
The United States District Court for the Eastern District of
Pennsylvania certified the class for settlement only, finding that
the proposed settlement was fair and that representation and notice
had been adequate. That court enjoined class members from
separately pursuing asbestos-related personal-injury suits in any
court, federal or state, pending the issuance of a final order. The
Court of Appeals for the Third Circuit vacated the District Court's
orders, holding that the class certification failed to satisfy Rule
23's requirements in several critical respects. We affirm the Court
of Appeals' judgment.
I A
The settlement-class certification we confront evolved in
response to an asbestos-litigation crisis. See
Georgine v.
Amchem Products, Inc., 83 F.3d
610, 618, and n. 2 (CA3 1996) (citing commentary). A United
States Judicial Con-
vada,
Michael F.
Easley of North Carolina,
Heidi Heitkamp of North Dakota,
W A. Drew Edmondson
of Oklahoma,
James S.
Gilmore III of Virginia, and
Calvin E. Holloway, Sr., of Guam; for the Asbestos Victims
of America by
Maynard Ungerman; for the Association of Trial
Lawyers of America by
Jeffrey Robert White and
Howard
F.
Twiggs; for Law Professors by
Charles Silver and
Samuel Issacharoff; for Owens-Illinois, Inc., by
James D.
Miller; and for Trial Lawyers for Public Justice by
Leslie
A. Brueckner and
Arthur H. Bryant.
598
ference Ad Hoc Committee on Asbestos Litigation, appointed by
THE CHIEF JUSTICE in September 1990, described facets of the
problem in a 1991 report:
"[This] is a tale of danger known in the 1930s, exposure
inflicted upon millions of Americans in the 1940s and 1950s,
injuries that began to take their toll in the 1960s, and a flood of
lawsuits beginning in the 1970s. On the basis of past and current
filing data, and because of a latency period that may last as long
as 40 years for some asbestos related diseases, a continuing stream
of claims can be expected. The final toll of asbestos related
injuries is unknown. Predictions have been made of 200,000 asbestos
disease deaths before the year 2000 and as many as 265,000 by the
year 2015.
"The most objectionable aspects of asbestos litigation can be
briefly summarized: dockets in both federal and state courts
continue to grow; long delays are routine; trials are too long; the
same issues are litigated over and over; transaction costs exceed
the victims' recovery by nearly two to one; exhaustion of assets
threatens and distorts the process; and future claimants may lose
altogether." Report of The Judicial Conference Ad Hoc Committee on
Asbestos Litigation 2-3 (Mar. 1991).
Real reform, the report concluded, required federal legislation
creating a national asbestos dispute-resolution scheme. See id., at
3, 27-35; see also id., at 42 (dissenting statement of Hogan, J.)
(agreeing that "a national solution is the only answer" and
suggesting "passage by Congress of an administrative claims
procedure similar to the Black Lung legislation"). As recommended
by the Ad Hoc Committee, the Judicial Conference of the United
States urged Congress to act. See Report of the Proceedings of the
Judicial Conference of the United States 33 (Mar. 12, 1991). To
this date, no congressional response has emerged.
599
In the face of legislative inaction, the federal courts-lacking
authority to replace state tort systems with a national toxic tort
compensation regime-endeavored to work with the procedural tools
available to improve management of federal asbestos litigation.
Eight federal judges, experienced in the superintendence of
asbestos cases, urged the Judicial Panel on Multidistrict
Litigation (MDL Panel), to consolidate in a single district all
asbestos complaints then pending in federal courts. Accepting the
recommendation, the MDL Panel transferred all asbestos cases then
filed, but not yet on trial in federal courts to a single district,
the United States District Court for the Eastern District of
Pennsylvania; pursuant to the transfer order, the collected cases
were consolidated for pretrial proceedings before Judge Weiner. See
In re Asbestos Products Liability Litigation (No. VI), 771
F. Supp. 415, 422-424 (JPML 1991).1 The order aggregated pending
cases only; no authority resides in the MDL Panel to license for
consolidated proceedings claims not yet filed.
B
After the consolidation, attorneys for plaintiffs and defendants
formed separate steering committees and began settlement
negotiations. Ronald L. Motley and Gene Locks-later appointed,
along with Motley's law partner Joseph F. Rice, to represent the
plaintiff class in this actioncochaired the Plaintiffs' Steering
Committee. Counsel for the Center for Claims Resolution (CCR), the
consortium of
1 In a series of orders, the MDL Panel had previously denied
other asbestos-case transfer requests. See
In re Asbestos and
Asbestos Insulation Material Products Liability Litigation, 431
F. Supp. 906,910 (JPML 1977);
In re Asbestos Products Liability
Litigation (No. II), MDL-416 (JPML Mar. 13, 1980) (unpublished
order);
In re Asbestos School Products Liability Litigation,
606 F. Supp. 713, 714 (JPML 1985);
In re Ship Asbestos Products
Liability Litigation, MDL-676 (JPML Feb. 4, 1986) (unpublished
order);
In re Leon Blair Asbestos Products Liability
Litigation, MDL-702 (JPML Feb. 6, 1987) (unpublished
order).
600
20 former asbestos manufacturers now before us as petitioners,
participated in the Defendants' Steering Committee.2 Although the
MDL Panel order collected, transferred, and consolidated only cases
already commenced in federal courts, settlement negotiations
included efforts to find a "means of resolving ... future cases."
Record, Doc. 3, p. 2 (Memorandum in Support of Joint Motion for
Conditional Class Certification); see also
Georgine v.
Amchem Products, Inc., 157 F. R. D. 246, 266 (ED Pa. 1994)
("primary purpose of the settlement talks in the consolidated MDL
litigation was to craft a national settlement that would provide an
alternative resolution mechanism for asbestos claims," including
claims that might be filed in the future).
In November 1991, the Defendants' Steering Committee made an
offer designed to settle all pending and future asbestos cases by
providing a fund for distribution by plaintiffs' counsel among
asbestos-exposed individuals. The Plaintiffs' Steering Committee
rejected this offer, and negotiations fell apart. CCR, however,
continued to pursue "a workable administrative system for the
handling of future claims."
Id., at 270.
To that end, CCR counsel approached the lawyers who had headed
the Plaintiffs' Steering Committee in the unsuccessful
negotiations, and a new round of negotiations began; that round
yielded the mass settlement agreement now in controversy. At the
time, the former heads of the Plaintiffs' Steering Committee
represented thousands of plaintiffs with then-pending
asbestos-related claims-claimants the parties
2 The CCR Companies are Amchem Products, Inc.; A. P. Green
Industries, Inc.; Armstrong World Industries, Inc.; Asbestos Claims
Management Corp.; Certainteed Corp.; C. E. Thurston & Sons,
Inc.; Dana Corp.; Ferodo America, Inc.; Flexitallic, Inc.; GAF
Building Materials, Inc.; I. U. North America, Inc.; Maremont
Corp.; National Services Industries, Inc.; Nosroc Corp.; Pfizer
Inc.; Quigley Co.; Shook & Fletcher Insulation Co.; T & N,
PLC; Union Carbide Corp.; and United States Gypsum Co. All of the
CCR petitioners stopped manufacturing asbestos products around
1975.
601
to this suit call "inventory" plaintiffs. CCR indicated in these
discussions that it would resist settlement of inventory cases
absent "some kind of protection for the future."
Id., at
294; see also id., at 295 (CCR communicated to the inventory
plaintiffs' attorneys that once the CCR defendants saw a rational
way to deal with claims expected to be filed in the future, those
defendants would be prepared to address the settlement of pending
cases).
Settlement talks thus concentrated on devising an administrative
scheme for disposition of asbestos claims not yet in litigation. In
these negotiations, counsel for masses of inventory plaintiffs
endeavored to represent the interests of the anticipated future
claimants, although those lawyers then had no attorney-client
relationship with such claimants.
Once negotiations seemed likely to produce an agreement
purporting to bind potential plaintiffs, CCR agreed to settle,
through separate agreements, the claims of plaintiffs who had
already filed asbestos-related lawsuits. In one such agreement, CCR
defendants promised to pay more than $200 million to gain release
of the claims of numerous inventory plaintiffs. After settling the
inventory claims, CCR, together with the plaintiffs' lawyers CCR
had approached, launched this case, exclusively involving persons
outside the MDL Panel's province-plaintiffs without already pending
lawsuits.3
C
The class action thus instituted was not intended to be
litigated. Rather, within the space of a single day, J anuary 15,
1993, the settling parties-CCR defendants and the representatives
of the plaintiff class described below-presented to the District
Court a complaint, an answer, a pro-
3 It is basic to comprehension of this proceeding to notice that
no transferred case is included in the settlement at issue, and no
case covered by the settlement existed as a civil action at the
time of the MDL Panel transfer.
602
posed settlement agreement, and a joint motion for conditional
class certification.4
The complaint identified nine lead plaintiffs, designating them
and members of their families as representatives of a class
comprising all persons who had not filed an asbestosrelated lawsuit
against a CCR defendant as of the date the class action commenced,
but who (1) had been exposedoccupationally or through the
occupational exposure of a spouse or household member-to asbestos
or products containing asbestos attributable to a CCR defendant, or
(2) whose spouse or family member had been so exposed.5 Untold
numbers of individuals may fall within this description. All named
plaintiffs alleged that they or a member of their family had been
exposed to asbestos-containing products of
4 Also on the same day, the CCR defendants filed a third-party
action against their insurers, seeking a declaratory judgment
holding the insurers liable for the costs of the settlement. The
insurance litigation, upon which implementation of the settlement
is conditioned, is still pending in the District Court. See,
e.
g., Georgine v.
Amchem Prods., Inc., No. 930215, 1994 WL
502475 (ED Pa., Sept. 2, 1994) (denying motion of insurers to
compel discovery).
5 The complaint defines the class as follows:
"(a) All persons (or their legal representatives) who have been
exposed in the United States or its territories (or while working
aboard U. S. military, merchant, or passenger ships), either
occupationally or through the occupational exposure of a spouse or
household member, to asbestos or to asbestos-containing products
for which one or more of the Defendants may bear legal liability
and who, as of January 15, 1993, reside in the United States or its
territories, and who have not, as of January 15, 1993, filed a
lawsuit for asbestos-related personal injury, or damage, or death
in any state or federal court against the Defendant(s) (or against
entities for whose actions or omissions the Defendant(s) bear legal
liability).
"(b) All spouses, parents, children, and other relatives (or
their legal representatives) of the class members described in
paragraph (a) above who have not, as of January 15, 1993, filed a
lawsuit for the asbestosrelated personal injury, or damage, or
death of a class member described in paragraph (a) above in any
state or federal court against the Defendantes) (or against
entities for whose actions or omissions the Defendant(s) bear legal
liability)." 1 App. 13-14.
603
CCR defendants. More than half of the named plaintiffs alleged
that they or their family members had already suffered various
physical injuries as a result of the exposure. The others alleged
that they had not yet manifested any asbestos-related condition.
The complaint delineated no subclasses; all named plaintiffs were
designated as representatives of the class as a whole.
The complaint invoked the District Court's diversity
jurisdiction and asserted various state-law claims for relief,
including (1) negligent failure to warn, (2) strict liability, (3)
breach of express and implied warranty, (4) negligent infliction of
emotional distress, (5) enhanced risk of disease, (6) medical
monitoring, and (7) civil conspiracy. Each plaintiff requested
unspecified damages in excess of $100,000. CCR defendants' answer
denied the principal allegations of the complaint and asserted 11
affirmative defenses.
A stipulation of settlement accompanied the pleadings; it
proposed to settle, and to preclude nearly all class members from
litigating against CCR companies, all claims not filed before
January 15, 1993, involving compensation for present and future
asbestos-related personal injury or death. An exhaustive document
exceeding 100 pages, the stipulation presents in detail an
administrative mechanism and a schedule of payments to compensate
class members who meet defined asbestos-exposure and medical
requirements. The stipulation describes four categories of
compensable disease: mesothelioma; lung cancer; certain "other
cancers" (colonrectal, laryngeal, esophageal, and stomach cancer);
and "non-malignant conditions" (asbestosis and bilateral pleural
thickening). Persons with "exceptional" medical claimsclaims that
do not fall within the four described diagnostic categories-may in
some instances qualify for compensation, but the settlement caps
the number of "exceptional" claims CCR must cover.
For each qualifying disease category, the stipulation specifies
the range of damages CCR will pay to qualifying claim-
604
ants. Payments under the settlement are not adjustable for
inflation. Mesothelioma claimants-the most highly compensated
category-are scheduled to receive between $20,000 and $200,000. The
stipulation provides that CCR is to propose the level of
compensation within the prescribed ranges; it also establishes
procedures to resolve disputes over medical diagnoses and levels of
compensation.
Compensation above the fixed ranges may be obtained for
"extraordinary" claims. But the settlement places both numerical
caps and dollar limits on such claims.6 The settlement also imposes
"case flow maximums," which cap the number of claims payable for
each disease in a given year.
Class members are to receive no compensation for certain kinds
of claims, even if otherwise applicable state law recognizes such
claims. Claims that garner no compensation under the settlement
include claims by family members of asbestos-exposed individuals
for loss of consortium, and claims by so-called "exposure-only"
plaintiffs for increased risk of cancer, fear of future
asbestos-related injury, and medical monitoring. "Pleural" claims,
which might be asserted by persons with asbestos-related plaques on
their lungs but no accompanying physical impairment, are also
excluded. Although not entitled to present compensation,
exposure-only claimants and pleural claimants may qualify for
benefits when and if they develop a compensable disease and meet
the relevant exposure and medical criteria. Defendants forgo
defenses to liability, including statute of limitations pleas.
Class members, in the main, are bound by the settlement in
perpetuity, while CCR defendants may choose to with-
6 Only three percent of the qualified mesothelioma, lung cancer,
and "other cancer" claims, and only one percent of the total number
of qualified "non-malignant condition" claims can be designated
"extraordinary." Average expenditures are specified for claims
found "extraordinary"; mesothelioma victims with compensable
extraordinary claims, for example, receive, on average,
$300,000.
605
draw from the settlement after ten years. A small number of
class members-only a few per year-may reject the settlement and
pursue their claims in court. Those permitted to exercise this
option, however, may not assert any punitive damages claim or any
claim for increased risk of cancer. Aspects of the administration
of the settlement are to be monitored by the AFL-CIO and class
counsel. Class counsel are to receive attorneys' fees in an amount
to be approved by the District Court.
D
On January 29, 1993, as requested by the settling parties, the
District Court conditionally certified, under Federal Rule of Civil
Procedure 23(b)(3), an encompassing opt-out class. The certified
class included persons occupationally exposed to defendants'
asbestos products, and members of their families, who had not filed
suit as of January 15. Judge Weiner appointed Locks, Motley, and
Rice as class counsel, noting that "[t]he Court may in the future
appoint additional counsel if it is deemed necessary and
advisable." Record, Doc. 11, p. 3 (Class Certification Order). At
no stage of the proceedings, however, were additional counsel in
fact appointed. Nor was the class ever divided into subclasses. In
a separate order, Judge Weiner assigned to Judge Reed, also of the
Eastern District of Pennsylvania, "the task of conducting fairness
proceedings and of determining whether the proposed settlement is
fair to the class." See 157 F. R. D., at 258. Various class members
raised objections to the settlement stipulation, and Judge Weiner
granted the objectors full rights to participate in the subsequent
proceedings.
Ibid.7
7These objectors, now respondents before this Court, include
three groups of individuals with overlapping interests, designated
as the "Windsor Group," the New Jersey "White Lung Group," and the
"Cargile Group." Margaret Balonis, an individual objector, is also
a respondent before this Court. Balonis states that her husband,
Casimir, was exposed to asbestos in the late 1940's and was
diagnosed with mesothelioma in May
606
In preliminary rulings, Judge Reed held that the District Court
had subject-matter jurisdiction, see
Carlough v.
Amchem
Products, Inc., 834 F. Supp. 1437, 1467-1468 (ED Pa. 1993), and
he approved the settling parties' elaborate plan for giving notice
to the class, see
Carlough v.
Amchem Products, Inc.,
158 F. R. D. 314, 336 (ED Pa. 1993). The courtapproved notice
informed recipients that they could exclude themselves from the
class, if they so chose, within a threemonth opt-out period.
Objectors raised numerous challenges to the settlement.
They urged that the settlement unfairly disadvantaged those
without currently compensable conditions in that it failed to
adjust for inflation or to account for changes, over time, in
medical understanding. They maintained that compensation levels
were intolerably low in comparison to awards available in tort
litigation or payments received by the inventory plaintiffs. And
they objected to the absence of any compensation for certain
claims, for example, medical monitoring, compensable under the tort
law of several States. Rejecting these and all other objections,
Judge Reed concluded that the settlement terms were fair and had
been negotiated without collusion. See 157 F. R. D., at
325,331-332. He also found that adequate notice had been given to
class members, see id., at 332-334, and that final class
certification under Rule 23(b)(3) was appropriate, see id., at
315.
As to the specific prerequisites to certification, the District
Court observed that the class satisfied Rule 23(a)(1)'s numerosity
requirement,S see ibid., a matter no one debates. The
1994, after expiration of the opt-out period, see
infra
this page and 608. The Balonises sued CCR members in Maryland state
court, but were charged with civil contempt for violating the
Federal District Court's antisuit injunction. Casimir Balonis died
in October 1996. See Brief for Balonis Respondents 9-11.
8 Rule 23(a)(1) requires that the class be "so numerous that
joinder of all members is impracticable."
607
Rule 23(a)(2) and (b)(3) requirements of commonality9 and
preponderance 10 were also satisfied, the District Court held, in
that
"[t]he members of the class have all been exposed to asbestos
products supplied by the defendants and all share an 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.
Whether the proposed settlement satisfies this interest and is
otherwise a fair, reasonable and adequate compromise of the claims
of the class is a predominant issue for purposes of Rule 23(b)(3)."
Id., at 316.
The District Court held next that the claims of the class
representatives were "typical" of the class as a whole, a
requirement of Rule 23(a)(3),11 and that, as Rule 23(b)(3)
demands,12 the class settlement was "superior" to other methods of
adjudication. See ibid.
Strenuous objections had been asserted regarding the adequacy of
representation, a Rule 23(a)(4) requirementP Objectors maintained
that class counsel and class representatives had disqualifying
conflicts of interests. In particular, objectors urged, claimants
whose injuries had become manifest and claimants without manifest
injuries should not have common counsel and should not be
aggregated in a single
9 Rule 23(a)(2) requires that there be "questions of law or fact
common to the class."
10 Rule 23(b)(3) requires that "the [common] questions of law or
fact ... predominate over any questions affecting only individual
members."
11 Rule 23(a)(3) states that "the claims ... of the
representative parties [must be] typical of the claims ... of the
class."
12 Rule 23(b)(3) requires that "a class action [be] superior to
other available methods for the fair and efficient adjudication of
the controversy." 13 Rule 23(a)(4) requires that "the
representative parties will fairly and adequately protect the
interests of the class."
608
class. Furthermore, objectors argued, lawyers representing
inventory plaintiffs should not represent the newly formed
class.
Satisfied that class counsel had ably negotiated the settlement
in the best interests of all concerned, and that the named parties
served as adequate representatives, the District Court rejected
these objections. See id., at 317-319, 326-332. Subclasses were
unnecessary, the District Court held, bearing in mind the added
cost and confusion they would entail and the ability of class
members to exclude themselves from the class during the three-month
opt-out period. See id., at 318-319. Reasoning that the
representative plaintiffs "have a strong interest that recovery for
all of the medical categories be maximized because they may have
claims in any, or several categories," the District Court found "no
antagonism of interest between class members with various medical
conditions, or between persons with and without currently manifest
asbestos impairment."
Id., at 318. Declaring class
certification appropriate and the settlement fair, the District
Court preliminarily enjoined all class members from commencing any
asbestos-related suit against the CCR defendants in any state or
federal court. See
Georgine v.
Amchem Products, Inc.,
878 F. Supp. 716, 726-727 (ED Pa. 1994).
The objectors appealed. The United States Court of Appeals for
the Third Circuit vacated the certification, holding that the
requirements of Rule 23 had not been satisfied. See
83 F.3d
610 (1996).
E
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-
609
certification issues and finding them dispositive, the Third
Circuit declined to decide other questions.
On class-action prerequisites, the Court of Appeals referred to
an earlier Third Circuit decision,
In re General Motors Corp.
Pick-Up Truck Fuel Tank Products Liability Litigation,
55 F.3d
768, cert. denied, 516 U. S. 824 (1995) (hereinafter
GM
Trucks), which held that although a class action may be
certified for settlement purposes only, Rule 23(a)'s requirements
must be satisfied as if the case were going to be litigated. 55 F.
3d, at 799-800. The same rule should apply, the Third Circuit said,
to class certification under Rule 23(b)(3). See 83 F. 3d, at 625.
But cf.
In re Asbestos Litigation,
90
F.3d 963, 975-976, and n. 8 (CA5 1996), cert. pending, Nos.
96-1379, 96-1394. While stating that the requirements of Rule 23(a)
and (b)(3) must be met "without taking into account the
settlement," 83 F. 3d, at 626, the Court of Appeals in fact closely
considered the terms of the settlement as it examined aspects of
the case under Rule 23 criteria. See id., at 630-634.
The Third Circuit recognized that Rule 23(a)(2)'s "commonality"
requirement is subsumed under, or superseded by, the more stringent
Rule 23(b)(3) requirement that questions common to the class
"predominate over" other questions. The court therefore trained its
attention on the "predominance" inquiry. See id., at 627. The
harmfulness of asbestos exposure was indeed a prime factor common
to the class, the Third Circuit observed. See id., at 626, 630. But
uncommon questions abounded.
In contrast to mass torts involving a single accident, class
members in this case were exposed to different asbestoscontaining
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
610
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] thee] 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.
In the Third Circuit's view, the "most salient" divergence of
interests separated plaintiffs already afflicted with an
asbestos-related disease from plaintiffs without manifest injury
(exposure-only plaintiffs). The latter would rationally want
protection against inflation for distant recoveries. See
ibid. They would also seek sturdy back-end opt-out rights
and "causation provisions that can keep pace with changing
14 Recoveries under the laws of different States spanned a wide
range.
Objectors assert, for example, that 15 percent of current
mesothelioma claims arise in California, where the statewide
average recovery is $419,674-or more than 209 percent above the
$200,000 maximum specified in the settlement for mesothelioma
claims not typed "extraordinary." See Brief for Respondents George
Windsor et al. 5-6, n. 5 (citing 2 App. 461).
611
science and medicine, rather than freezing in place the science
of 1993."
Id., at 630-631. Already injured parties, in
contrast, would care little about such provisions and would
rationally trade them for higher current payouts. See id., at 631.
These and other adverse interests, the Court of Appeals carefully
explained, strongly suggested that an undivided set of
representatives could not adequately protect the discrete interests
of both currently afflicted and exposureonly claimants.
The Third Circuit next rejected the District Court's
determination that the named plaintiffs were "typical" of the
class, noting that this Rule 23(a)(3) inquiry overlaps the adequacy
of representation question: "both look to the potential for
conflicts in the class."
Id., at 632. Evident conflict
problems, the court said, led it to hold that "no set of
representatives can be 'typical' of this class."
Ibid.
The Court of Appeals similarly rejected the District Court's
assessment of the superiority of the class action. The Third
Circuit initially noted that a class action so large and complex
"could not be tried."
Ibid. The court elaborated most
particularly, however, on the unfairness of binding exposure-only
plaintiffs who might be unaware of the class action or lack
sufficient information about their exposure to make a reasoned
decision whether to stay in or opt out. See id., at 633. "A series
of statewide or more narrowly defined adjudications, either through
consolidation under Rule 42(a) or as class actions under Rule 23,
would seem preferable," the Court of Appeals said.
Id., at
634.
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
612
suit in federal court, for their depositions showed that "[t]hey
claimed no damages and no present injury."
Id., at 638.
We granted certiorari, 519 U. S. 957 (1996), and now affirm.
II
Objectors assert in this Court, as they did in the District
Court and Court of Appeals, an array of jurisdictional barriers.
Most fundamentally, they maintain that the settlement proceeding
instituted by class counsel and CCR is not a justiciable case or
controversy within the confines of Article III of the Federal
Constitution. In the main, they say, the proceeding is a
nonadversarial endeavor to impose on countless individuals without
currently ripe claims an administrative compensation regime binding
on those individuals if and when they manifest injuries.
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 exposureonly claimants did not meet the
then-current amount-incontroversy 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 608, 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. 43, 66-67 (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
613
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
III
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
(1), 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").
15 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 630-631, 641. 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, ante, p. 424 (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).
614
In addition to satisfying Rule 23(a)'s prerequisites, parties
seeking class certification must show that the action is
maintainable under Rule 23(b)(1), (2), or (3). Rule 23(b)(1) covers
cases in which separate actions by or against individual class
members would risk establishing "incompatible standards of conduct
for the party opposing the class," Fed. Rule Civ. Proc.
23(b)(1)(A), or would "as a practical matter be dispositive of the
interests" of nonparty class members "or substantially impair or
impede their ability to protect their interests," Rule 23(b)(1)(B).
Rule 23(b)(1)(A) "takes in cases where the party is obliged by law
to treat the members of the class alike (a utility acting toward
customers; a government imposing a tax), or where the party must
treat all alike as a matter of practical necessity (a riparian
owner using water as against downriver owners)." Kaplan, Continuing
Work 388 (footnotes omitted). Rule 23(b)(1)(B) includes, for
example, "limited fund" cases, instances in which numerous persons
make claims against a fund insufficient to satisfy all claims. See
Advisory Committee's Notes on Fed. Rule Civ. Proc. 23, 28 U. S. C.
App., pp. 696-697 (hereinafter Adv. Comm. Notes).
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").
In the 1966 class-action amendments, Rule 23(b)(3), the category
at issue here, was "the most adventuresome" innovation. See Kaplan,
A Prefatory Note, 10 B. C. Ind. & Com. L. Rev. 497, 497 (1969)
(hereinafter Kaplan, Prefatory Note). Rule 23(b)(3) added to the
complex-litigation arsenal class actions for damages designed to
secure judgments binding all class members save those who
affirmatively elected to be
615
excluded. See 7 A C. Wright, A. Miller, & M. Kane, Federal
Practice and Procedure § 1777, p. 517 (2d ed. 1986) (hereinafter
Wright, Miller, & Kane); see generally Kaplan, Continuing Work
379-400. Rule 23(b)(3) "opt-out" class actions superseded the
former "spurious" class action, so characterized because it
generally functioned as a permissive joinder ("opt-in") device. See
7 A Wright, Miller, & Kane § 1753, at 28-31, 42-44; see also
Adv. Comm. Notes, 28 U. S. C. App., p.695.
Framed for situations in which "class-action treatment is not as
clearly called for" as it is in Rule 23(b)(1) and (b)(2)
situations, Rule 23(b)(3) permits certification where class suit
"may nevertheless be convenient and desirable." Adv. Comm. Notes,
28 U. S. C. App., p. 697. To qualify for certification under Rule
23(b)(3), a class must meet two requirements beyond the Rule 23(a)
prerequisites: Common questions must "predominate over any
questions affecting only individual members"; and class resolution
must be "superior to other available methods for the fair and
efficient adjudication of the controversy." In adding
"predominance" and "superiority" to the
qualification-for-certification list, the Advisory Committee sought
to cover cases "in which a class action would achieve economies of
time, effort, and expense, and promote ... uniformity of decision
as to persons similarly situated, without sacrificing procedural
fairness or bringing about other undesirable results."
Ibid.
Sensitive to the competing tugs of individual autonomy for those
who might prefer to go it alone or in a smaller unit, on the one
hand, and systemic efficiency on the other, the Reporter for the
1966 amendments cautioned: "The new provision invites a close look
at the case before it is accepted as a class action .... " Kaplan,
Continuing Work 390.
Rule 23(b)(3) includes a nonexhaustive list of factors pertinent
to a court's "close look" at the predominance and superiority
criteria:
616
"(A) the interest of members of the class in individually
controlling the prosecution or defense of separate actions; (B) the
extent and nature of any litigation concerning the controversy
already commenced by or against members of the class; (C) the
desirability or undesirability of concentrating the litigation of
the claims in the particular forum; (D) the difficulties likely to
be encountered in the management of a class action."
In setting out these factors, the Advisory Committee for the
1966 reform anticipated that in each case, courts would "consider
the interests of individual members of the class in controlling
their own litigations and carrying them on as they see fit." Adv.
Comm. Notes, 28 U. S. C. App., p. 698. They elaborated:
"The interests of individuals in conducting separate lawsuits
may be so strong as to call for denial of a class action. On the
other hand, these interests may be theoretic rather than practical;
the class may have a high degree of cohesion and prosecution of the
action through representatives would be quite unobjectionable, or
the amounts at stake for individuals may be so small that separate
suits would be impracticable." Ibid.
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.
617
While the text of Rule 23(b)(3) does not exclude from
certification cases in which individual damages run high, the
Advisory Committee had dominantly in mind vindication of "the
rights of groups of people who individually would be without
effective strength to bring their opponents into court at all."
Kaplan, Prefatory Note 497. As concisely recalled in a recent
Seventh Circuit opinion:
"The policy at the very core of the class action mechanism is to
overcome the problem that small recoveries do not provide the
incentive for any individual to bring a solo action prosecuting his
or her rights. A class action solves this problem by aggregating
the relatively paltry potential recoveries into something worth
someone's (usually an attorney's) labor." Mace v. Van Ru
Credit Corp., 109 F.3d
338, 344 (1997).
To alert class members to their right to "opt out" of a (b)(3)
class, Rule 23 instructs the court to "direct to the members of the
class the best notice practicable under the circumstances,
including individual notice to all members who can be identified
through reasonable effort." Fed. Rule Civ. Proc. 23(c)(2); see
Eisen v.
Carlisle &
Jacquelin, 417 U. S. 156, 173-177
(1974) (individual notice to class members identifiable through
reasonable effort is mandatory in (b)(3) actions; requirement may
not be relaxed based on high cost).
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 the decades since the 1966 revision of Rule 23, classaction
practice has become ever more "adventuresome" as a means of coping
with claims too numerous to secure their
618
"just, speedy, and inexpensive determination" one by one. See
Fed. Rule Civ. Proc. 1. The development reflects concerns about the
efficient use of court resources and the conservation of funds to
compensate claimants who do not line up early in a litigation
queue. See generally J. Weinstein, Individual Justice in Mass Tort
Litigation: The Effect of Class Actions, Consolidations, and Other
Multiparty Devices (1995); Schwarzer, Settlement of Mass Tort Class
Actions:
Order out of Chaos, 80 Cornell L. Rev. 837 (1995).
Among current applications of Rule 23(b)(3), the "settlement
only" class has become a stock device. See,
e. g., T.
Willging, L. Hooper, & R. Niemic, Empirical Study of Class
Actions in Four Federal District Courts: Final Report to the
Advisory Committee on Civil Rules 61-62 (1996) (noting large number
of such cases in districts studied). Although all Federal Circuits
recognize the utility of Rule 23(b)(3) settlement classes, courts
have divided on the extent to which a proffered settlement affects
court surveillance under Rule 23's certification criteria.
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 (CA5) ("in settlement class
context, common issues arise from the settlement itself") (citing
H. Newberg & A. Conte, 2 Newberg on Class Actions § 11.28, p.
11-58 (3d ed. 1992));
White v.
National Football
League, 41 F.3d
402, 408 (CA8 1994) ("adequacy of class representation ... is
ultimately determined by the settlement itself"), cert. denied, 515
U. S. 1137 (1995);
In re A. H. Robins Co., 880 F.2d
709, 740 (CA4) ("[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
619
v.
Aetna Casualty &
Surety Co., 493 U. S. 959
(1989);
Malchman v.
Davis, 761
F.2d 893, 900 (CA2 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 (1986).
A proposed amendment to Rule 23 would expressly authorize
settlement class certification, in conjunction with a motion by the
settling parties for Rule 23(b)(3) certification, "even though the
requirements of subdivision (b)(3) might not be met for purposes of
trial." Proposed Amendment to Fed. Rule Civ. Proc. 23(b), 117 S.
Ct. No. 1 CXIX, CLIV to CLV (Aug. 1996) (Request for Comment). In
response to the publication of this proposal, voluminous public
comments-many of them opposed to, or skeptical of, the
amendment-were received by the Judicial Conference Standing
Committee on Rules of Practice and Procedure. See,
e. g.,
Letter from Steering Committee to Oppose Proposed Rule 23, signed
by 129 law professors (May 28, 1996); Letter from Paul D.
Carrington (May 21, 1996). The Committee has not yet acted on the
matter. We consider the certification at issue under the Rule as it
is currently framed.
IV
We granted review to decide the role settlement may play, under
existing Rule 23, in determining the propriety of class
certification. The Third Circuit's opinion stated that each of the
requirements of Rule 23(a) and (b)(3) "must be satisfied without
taking into account the settlement." 83 F. 3d, at 626 (quoting
GM Trucks, 55 F. 3d, at 799). That statement, petitioners
urge, is incorrect.
We agree with petitioners to this limited extent: Settlement is
relevant to a class certification. The Third Circuit's opinion
bears modification in that respect. But, as we earlier observed,
see
supra, at 609, the Court of Appeals in fact did not
ignore the settlement; instead, that court homed in on settlement
terms in explaining why it found the absentees'
620
interests inadequately represented. See 83 F. 3d, at 630631. The
Third Circuit's close inspection of the settlement in that regard
was altogether proper.
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 Rulethose 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 Rule 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).
Rule 23(e), on settlement of class actions, reads in its
entirety: "A class action shall not be dismissed or compromised
16 Portions of the opinion dissenting in part appear to assume
that settlement counts only one way-in favor of certification. See
post, at 629, 630, 641. But see
post, at 635. To the
extent that is the dissent's meaning, we disagree. Settlement,
though a relevant factor, does not inevitably signal that
class-action certification should be granted more readily than it
would be were the case to be litigated. For reasons the Third
Circuit aired, see
83 F.3d
610, 626-635 (1996), proposed settlement classes sometimes
warrant more, not less, caution on the question of
certification.
621
without the approval of the court, and notice of the proposed
dismissal or compromise shall be given to all members of the class
in such manner as the court directs." This prescription was
designed to function as an additional requirement, not a
superseding direction, for the "class action" to which Rule 23(e)
refers is one qualified for certification under Rule 23(a) and (b).
Cf.
Eisen, 417 U. S., at 176-177 (adequate representation
does not eliminate additional requirement to provide notice).
Subdivisions (a) and (b) 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.
The safeguards provided by the Rule 23(a) and (b)
classqualifying criteria, we emphasize, are not impractical
impediments-checks shorn of utility-in the settlement-class
context. First, the standards set for the protection of absent
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.
Second, if a fairness inquiry under Rule 23(e) controlled
certification, eclipsing Rule 23(a) and (b), and permitting class
designation despite the impossibility of litigation, both class
counsel and court would be disarmed. Class counsel confined to
settlement negotiations could not use the threat of litigation to
press for a better offer, see Coffee, Class Wars: The Dilemma of
the Mass Tort Class Action, 95 Colum. L. Rev. 1343, 1379-1380
(1995), and the court would face a bargain proffered for its
approval without benefit of adversarial investigation, see,
e. g.,
Kamilewicz v.
Bank of Boston Corp.,
100 F.3d
1348, 1352 (CA7 1996) (Easterbrook, J., dissenting from denial
of rehearing en bane) (parties "may even put one over on the court,
in a staged performance"), cert. denied, 520 U. S. 1204 (1997).
622
Federal courts, in any case, lack authority to substitute for
Rule 23's certification criteria a standard never adoptedthat 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 tablethe sprawling class the District Court
certified does not satisfy Rule 23's requirementsP
A
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,
17We do not inspect and set aside for insufficient evidence
District Court findings of fact. Cf.
post, at 633, 637-638.
Rather, we focus on the requirements of Rule 23, and endeavor to
explain why those requirements cannot be met for a class so
enormously diverse and problematic as the one the District Court
certified.
623
at 598, 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 7 A Wright, Miller, & Kane 518519.19 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 District Court also relied upon this commonality: "The
members of the class have all been exposed to asbestos products
supplied by the defendants .... " 157 F. R. D., at 316. Even if
Rule 23(a)'s commonality requirement may be satis-
18 In this respect, the predominance requirement of Rule
23(b)(3) is similar to the requirement of Rule 23(a)(3) that
"claims or defenses" of the named representatives must be "typical
of the claims or defenses of the class." The words "claims or
defenses" in this context-just as in the context of Rule 24(b)(2)
governing permissive intervention-"manifestly refer to the kinds of
claims or defenses that can be raised in courts of law as part of
an actual or impending law suit."
Diamond v.
Charles,
476 U. S. 54,
76-77 (1986) (O'CONNOR, J., concurring in part and concurring in
judgment).
19 This case, we note, involves no "limited fund" capable of
supporting class treatment under Rule 23(b)(I)(B), which does not
have a predominance requirement. See
Georgine v.
Amchem
Products, Inc., 157 F. R. D. 246, 318 (ED Pa. 1994); see also
id., at 291, and n. 40. The settling parties sought to proceed
exclusively under Rule 23(b)(3).
624
fied by that shared experience, the predominance criterion is
far more demanding. See 83 F. 3d, at 626-627. Given the greater
number of questions peculiar to the several categories of class
members, and to individuals within each category, and the
significance of those uncommon questions, any overarching dispute
about the health consequences of asbestos exposure cannot satisfy
the Rule 23(b)(3) predominance standard.
The Third Circuit highlighted the disparate questions un-
dermining class cohesion in this case:
"Class members were exposed to different asbestoscontaining
products, for different amounts of time, in different ways, and
over different periods. Some class members suffer no physical
injury or have only asymptomatic pleural changes, while others
suffer from lung cancer, disabling asbestosis, or from mesothelioma
.... Each has a different history of cigarette smoking, a factor
that complicates the causation inquiry.
"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.
Differences in state law, the Court of Appeals observed,
compound these disparities. See
id., at 627 (citing
Phillips Petroleum Co. v.
Shutts, 472 U. S. 797, 823
(1985)).
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
625
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 615, 616. 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." Adv. Comm. Notes, 28
U. S. C. App., p. 697. 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
1970's, 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.
B
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 (1982). "[A] class representative must be part of
the class and 'pos-
626
sess 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 (1977) (quoting
Schlesinger v.
Reservists Comm. to Stop the War, 418 U. S. 208, 216
(1974)).20
As the Third Circuit pointed out, named parties with diverse
medical conditions sought to act on behalf of a single giant class
rather than on behalf of discrete subclasses. In significant
respects, the interests of those within the single class are not
aligned. Most saliently, for the currently injured, the critical
goal is generous immediate payments. That goal tugs against the
interest of exposure-only plaintiffs in ensuring an ample,
inflation-protected fund for the future. Cf.
General Telephone
Co. of Northwest v.
EEOC, 446 U. S. 318, 331 (1980)
("In employment discrimination litigation, conflicts might arise,
for example, between employees and applicants who were denied
employment and who will, if granted relief, compete with employees
for fringe benefits or seniority. Under Rule 23, the same plaintiff
could not represent these classes.").
The disparity between the currently injured and exposure-only
categories of plaintiffs, and the diversity within each category
are not made insignificant by the District Court's finding that
petitioners' assets suffice to pay claims under the settlement. See
157 F. R. D., at 291. AI-
2°The adequacy-of-representation requirement "tend[s] to merge"
with the commonality and typicality criteria of Rule 23(a), which
"serve as guideposts for determining whether ... maintenance of a
class action is economical and whether the named plaintiff's claim
and the class claims are so interrelated that the interests of the
class members will be fairly and adequately protected in their
absence."
General Telephone Co. of Southwest v.
Falcon, 457 U.
S. 147, 157, n. 13 (1982). The adequacy heading also factors in
competency and conflicts of class counsel. See id., at 157158, n.
13. Like the Third Circuit, we decline to address
adequacy-ofcounsel issues discretely in light of our conclusions
that common questions of law or fact do not predominate and that
the named plaintiffs cannot adequately represent the interests of
this enormous class.
627
though this is not a "limited fund" case certified under Rule
23(b)(1)(B), the terms of the settlement reflect essential
allocation decisions designed to confine compensation and to limit
defendants' liability. For example, as earlier described, see
supra, at 604-605, the settlement includes no adjustment for
inflation; only a few claimants per year can opt out at the back
end; and loss-of-consortium claims are extinguished with no
compensation.
The settling parties, in sum, achieved a global compromise with
no structural assurance of fair and adequate representation for the
diverse groups and individuals affected. Although the named parties
alleged a range of complaints, each served generally as
representative for the whole, not for a separate constituency. In
another asbestos class action, the Second Circuit spoke precisely
to this point:
"[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 (1992), modified on reh'g sub nom. In re
Findley, 993 F. 2d 7 (1993).
The Third Circuit found no assurance here-either in the terms of
the settlement or in the structure of the negotiations-that the
named plaintiffs operated under a proper understanding of their
representational responsibilities. See
628
83 F. 3d, at 630-631. That assessment, we conclude, is on the
mark.
C
Impediments to the provision of adequate notice, the Third
Circuit emphasized, rendered highly problematic any endeavor to tie
to a settlement class persons with no perceptible asbestos-related
disease at the time of the settlement.
Id., at 633; cf.
In re Asbestos Litigation, 90 F. 3d, at 999-1000 (Smith, J.,
dissenting). Many persons in the exposure-only category, the Court
of Appeals stressed, may not even know of their exposure, or
realize the extent of the harm they may incur. Even if they fully
appreciate the significance of class notice, those without current
afflictions may not have the information or foresight needed to
decide, intelligently, whether to stay in or opt out.
Family members of asbestos-exposed individuals may themselves
fall prey to disease or may ultimately have ripe claims for loss of
consortium. Yet large numbers of people in this category-future
spouses and children of asbestos victims-could not be alerted to
their class membership. And current spouses and children of the
occupationally exposed may know nothing of that exposure.
Because we have concluded that the class in this case cannot
satisfy the requirements of common issue predominance and adequacy
of representation, we need not rule, definitively, on the notice
given here. In accord with the Third Circuit, however, see 83 F.
3d, at 633-634, we recognize the gravity of the question whether
class action notice sufficient under the Constitution and Rule 23
could ever be given to legions so unselfconscious and
amorphous.
v
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 as-
629
bestos 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 rule makers' 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).
***
For the reasons stated, the judgment of the Court of Appeals for
the Third Circuit is
Affirmed.
JUSTICE O'CONNOR took no part in the consideration or decision
of this case.
JUSTICE BREYER, with whom JUSTICE STEVENS joins, concurring in
part and dissenting in part.
Although I agree with the Court's basic holding that
"[s]ettlement is relevant to a class certification,"
ante,
at 619, I find several problems in its approach that lead me to a
different conclusion. First, I believe that the need for settlement
in this mass tort case, with hundreds of thousands of lawsuits, is
greater than the Court's opinion suggests. Second, I would give
more weight than would the majority to settlement-related issues
for purposes of determining whether common issues predominate.
Third, I am uncertain about the Court's determination of adequacy
of representa-
21 The opinion dissenting in part is a forceful statement of
that argument.
630
tion, and do not believe it appropriate for this Court to
second-guess the District Court on the matter without first having
the Court of Appeals consider it. Fourth, I am uncertain about the
tenor of an opinion that seems to suggest the settlement is unfair.
And fifth, in the absence of further review by the Court of
Appeals, I cannot accept the majority's suggestions that "notice"
is inadequate.
These difficulties flow from the majority's review of what are
highly fact-based, complex, and difficult matters, matters that are
inappropriate for initial review before this Court. The law gives
broad leeway to district courts in making class certification
decisions, and their judgments are to be reviewed by the court of
appeals only for abuse of discretion. See
Califano v.
Yamasaki, 442
U. S. 682, 703 (1979). Indeed, the District Court's
certification decision rests upon more than 300 findings of fact
reached after five weeks of comprehensive hearings. Accordingly, I
do not believe that we should in effect set aside the findings of
the District Court. That court is far more familiar with the issues
and litigants than is a court of appeals or are we, and therefore
has "broad power and discretion ... with respect to matters
involving the certification" of class actions.
Reiter v.
Sonotone Corp., 442 U. S. 330, 345
(1979); cf.
Cooter &
Gell v.
Hartmarx
Corp., 496 U. S.
384, 402 (1990) (district court better situated to make
fact-dependent legal determinations in Rule 11 context).
I do not believe that we can rely upon the Court of Appeals'
review of the District Court record, for that review, and its
ultimate conclusions, are infected by a legal error.
E. g.,
Georgine v.
Amchem Products, Inc., 83
F.3d 610, 626 (CA3 1996) (holding that
"considered as a
litigation class," the class cannot meet Federal Rule of Civil
Procedure 23's requirements (emphasis added)). There is no evidence
that the Court of Appeals at any point considered the settlement as
something that would help the class meet Rule 23. I find, moreover,
the fact-related issues presented here sufficiently
631
close to warrant further detailed appellate court review under
the correct legal standard. Cf.
Reno v.
Bossier Parish
School Bd., 520
U. S. 471, 486 (1997). And I shall briefly explain why this is
so.
I
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 SD N. Y. 1991). 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 (CA3 1986); see also Edley & Weiler, Asbestos: A
MultiBillion-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.
632
Delays, high costs, and a random pattern of noncompensation led
the Judicial Conference Ad Hoc Committee on Asbestos Litigation to
transfer all federal asbestos personalinjury 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." "[O]f
each asbestos litigation dollar, 61 cents is consumed in
transaction costs .... Only 39 cents were paid to the asbestos
victims" (citing Rand finding)); 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 389-395.
Although the transfer of the federal asbestos cases did not
produce a general settlement, it was intertwined with and led to a
lengthy year-long negotiation between the cochairs of the
Plaintiff's Multi-District Litigation Steering Committee (elected
by the Plaintiff's Committee Members and approved by the District
Court) and the 20 asbestos defendants who are before us here.
Georgine v.
Amchem Products, Inc., 157 F. R. D. 246,
266-267 (ED Pa. 1994); App. 660-662.
633
These "protracted and vigorous" negotiations led to the present
partial settlement, which will pay an estimated $1.3 billion and
compensate perhaps 100,000 class members in the first 10 years. 157
F. R. D., at 268, 287. "The negotiations included a substantial
exchange of information" between class counsel and the 20 defendant
companies, including "confidential data" showing the defendants'
historical settlement averages, numbers of claims filed and
settled, and insurance resources.
Id., at 267. "Virtually no
provision" of the settlement "was not the subject of significant
negotiation," and the settlement terms "changed substantially"
during the negotiations.
Ibid. In the end, the negotiations
produced a settlement that, the District Court determined based on
its detailed review of the process, was "the result of armslength
adversarial negotiations by extraordinarily competent and
experienced attorneys."
Id., at 335.
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.
I mention this matter because it suggests that the settlement
before us is unusual in terms of its importance, both to many
potential plaintiffs and to defendants, and with respect to the
time, effort, and expenditure that it reflects. All of which leads
me to be reluctant to set aside the District Court's findings
without more assurance than I have that they are wrong. I cannot
obtain that assurance through comprehensive review of the record
because that is properly the job of the Court of Appeals and that
court, understandably, but as we now hold, mistakenly, believed
that settle-
634
ment was not a relevant (and, as I would say, important)
consideration.
Second, the majority, in reviewing the District Court's
determination that common "issues of fact and law predominate,"
says that the predominance "inquiry trains on the legal or factual
questions that qualify each class member's case as a genuine
controversy, questions that preexist any settlement."
Ante,
at 623 (footnote omitted). I find it difficult to interpret this
sentence in a way that could lead me to the majority's conclusion.
If the majority means that these pre settlement questions are what
matters, then how does it reconcile its statement with its basic
conclusion that "settlement is relevant" to class certification, or
with the numerous lower court authority that says that settlement
is not only relevant, but important? See,
e. g., In re A. H.
Robins Co., 880 F.2d
709, 740 (CA4), cert. denied
sub nom. Anderson v.
Aetna Casualty &
Surety Co., 493 U. S. 959
(1989);
In re Beef Industry Antitrust Litigation, 607 F.2d
167, 177178 (CA5 1979), cert. denied
sub nom. Iowa Beef
Processors, Inc. v.
Meat Price Investigators Assn., 452
U. S. 905 (1981); 2 H. Newberg & A. Conte, Newberg on Class
Actions § 11.27, pp. 11-54 to 11-55 (3d ed. 1992).
Nor do I understand how one could decide whether common
questions "predominate" in the abstract-without looking at what is
likely to be at issue in the proceedings that will ensue, namely,
the settlement. Every group of human beings, after all, has some
features in common, and some that differ. How can a court make a
contextual judgment of the sort that Rule 23 requires without
looking to what proceedings will follow? Such guideposts help it
decide whether, in light of common concerns and differences,
certification will achieve Rule 23's basic objective-"economies of
time, effort, and expense." Advisory Committee's Notes on Fed. Rule
Civ. Proc. 23(b)(3), 28 U. S. C. App., p. 697. As this Court has
previously observed, "sometimes it may be necessary for the court
to probe behind the pleadings before coming to
635
rest on the certification question."
General Telephone Co. of
Southwest v.
Falcon, 457 U. S. 147, 160
(1982); see also 7B C. Wright, A. Miller, & M. Kane, Federal
Practice and Procedure § 1785, p. 107, and n. 34 (1986). I am not
saying that the "settlement counts only one way."
Ante, at
620, n. 16. Rather, the settlement may simply "add a great deal of
information to the court's inquiry and will often expose diverging
interests or common issues that were not evident or clear from the
complaint" and courts "can and should" look to it to enhance the
"ability ... to make informed certification decisions."
In re
Asbestos Litigation, 90 F.3d
963, 975 (CA51996).
The majority may mean that the District Court gave too much
weight to the settlement. But I am not certain how it can reach
that conclusion. It cannot rely upon the Court of Appeals, for that
court gave no positive weight at all to the settlement. Nor can it
say that the District Court relied solely on "a common interest in
a fair compromise,"
ante, at 623, for the District Court did
not do so. Rather, it found the settlement relevant because it
explained the importance of the class plaintiffs' common features
and common interests. The court found predominance in part
because:
"The members of the class have all been exposed to asbestos
products supplied by the defendants and all share an 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 settlement is relevant because it means that these common
features and interests are likely to be important in the proceeding
that would ensue-a proceeding that would focus primarily upon
whether or not the proposed settlement fairly and properly
satisfied the interests class members had in common. That is to
say, the settlement underscored the im-
636
portance of (a) the common fact of exposure, (b) the common
interest in receiving
some compensation for certain rather
than running a strong risk of
no compensation, and (c) the
common interest in avoiding large legal fees, other transaction
costs, and delays.
Ibid.
Of course, as the majority points out, there are also important
differences among class members. Different plaintiffs were exposed
to different products for different times; each has a distinct
medical history and a different history of smoking; and many cases
arise under the laws of different States. The relevant question,
however, is
how much these differences matter in respect to
the legal proceedings that lie ahead. Many, if not all, toxic tort
class actions involve plaintiffs with such differences. And the
differences in state law are of diminished importance in respect to
a proposed settlement in which the defendants have waived all
defenses and agreed to compensate all those who were injured.
Id., at 292.
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.
637
Third, the majority concludes that the "representative parties"
will not "fairly and adequately protect the interests of the
class." Rule 23(a)(4). It finds a serious conflict between
plaintiffs who are now injured and those who may be injured in the
future because "for the currently injured, the critical goal is
generous immediate payments," a goal that "tugs against the
interest of exposure-only plaintiffs in ensuring an ample,
inflation-protected fund for the future."
Ante, at 626.
I agree that there is a serious problem, but it is a problem
that often exists in toxic tort cases. See Weinstein,
supra,
at 64 (noting that conflict "between present and future claimants"
"is almost always present in some form in mass tort cases because
long latency periods are needed to discover injuries"); see also
Judicial Conference Report 34-35 ("Because many of the defendants
in these cases have limited assets that may be called upon to
satisfy the judgments obtained under current common tort rules and
remedies, there is a 'real and present danger that the available
assets will be exhausted before those later victims can seek
compensation to which they are entitled'" (citation omitted)). And
it is a problem that potentially exists whenever a single defendant
injures several plaintiffs, for a settling plaintiff leaves fewer
assets available for the others. With class actions, at least,
plaintiffs have the consolation that a district court, thoroughly
familiar with the facts, is charged with the responsibility of
ensuring that the interests of no class members are sacrificed.
But this Court cannot easily safeguard such interests through
review of a cold record. "What constitutes adequate representation
is a question of fact that depends on the circumstances of each
case." 7 A Wright, Miller, & Kane, Federal Practice and
Procedure § 1765, at 271. That is particularly so when, as here,
there is an unusual baseline, namely, the "'real and present
danger'" described by the Judicial Conference Report above. The
majority's use of the
638
lack of an inflation adjustment as evidence of inadequacy of
representation for future plaintiffs,
ante, at 626-627, is
one example of this difficulty. An inflation adjustment might not
be as valuable as the majority assumes if most plaintiffs are old
and not worried about receiving compensation decades from now.
There are, of course, strong arguments as to its value. But that
disagreement is one that this Court is poorly situated to
resolve.
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 a 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."
Id., 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 627, 628,
but
639
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 625-628. 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 ... defend-
640
ants"); 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.
Finally, I believe it is up to the District Court, rather than
this Court, to review the legal sufficiency of notice to members of
the class. The District Court found that the plan to provide notice
was implemented at a cost of millions of dollars and included
hundreds of thousands of individual notices, a wide-ranging
television and print campaign, and significant additional efforts
by 35 international and national unions to notify their members.
Id., at 312-313, 336. Every notice emphasized that an
individual did not currently have to be sick to be a class member.
And in the end, the District Court was "confident" that Rule 23 and
due process requirements were satisfied because, as a result of
this "extensive and expensive notice procedure," "over six million"
individuals "received actual notice materials," and "millions more"
were reached by the media campaign.
Id., at 312, 333, 336.
Although the majority, in principle, is reviewing a Court of
Appeals' conclusion, it seems to me that its opinion might call
into question the fact-related determinations of the District
641
Court.
Ante, at 628. To the extent that it does so, I
disagree, for such findings cannot be so quickly disregarded. And I
do not think that our precedents permit this Court to do so. See
Reiter, 442 U. S., at 345;
Yamasaki, 442 U. S., at
703.
II
The issues in this case are complicated and difficult. The
District Court might have been correct. Or not. Subclasses might be
appropriate. Or not. I cannot tell. And I do not believe that this
Court should be in the business of trying to make these fact-based
determinations. That is a job suited to the district courts in the
first instance, and the courts of appeals on review. But there is
no reason in this case to believe that the Court of Appeals
conducted its prior review with an understanding that the
settlement could have constituted a reasonably strong factor in
favor of class certification. For this reason, I would provide the
courts below with an opportunity to analyze the factual questions
involved in certification by vacating the judgment, and remanding
the case for further proceedings.
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