CASES ADJUDGED
IN THE
SUPREME COURT OF THE UNITED STATES
AT
OCTOBER TERM, 2001
Syllabus
DEVLIN
v. SCARDELLETTI ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FOURTH
CIRCUIT
No. 01-417. Argued March 26, 2002-Decided June 10,2002
Petitioner retiree participates in a defined benefits pension
plan (Plan) that was amended in 1991 to add a cost of living
increase (COLA). Because the Plan could not support such a large
benefits increase, its trustees ultimately eliminated the COLA in
1997 and filed a class action in the Maryland Federal District
Court, seeking a declaratory judgment that the 1997 amendment was
binding on all Plan members or that the 1991 COLA was void.
Petitioner's separate challenge to the 1997 amendment was dismissed
by a New York Federal District Court, which found that the Maryland
court should resolve the matter. By this time, the Maryland court
had already conditionally certified a class under Federal Rule of
Civil Procedure 23(b)(1). After the trustees asked the court to
approve their settlement with the class representatives, petitioner
moved to intervene. The District Court denied his motion as
untimely. It then heard objections to the settlement, including
those advanced by petitioner, and approved the settlement.
Petitioner appealed. The Fourth Circuit affirmed the District
Court's denial of intervention and held that, because petitioner
was not a named class representative and because he had been
properly denied the right to intervene, he lacked standing to
challenge the settlement.
Held: Nonnamed class members like petitioner who have
objected in a timely manner to approval of a settlement at a
fairness hearing have the power to bring an appeal without first
intervening. Pp. 6-14.
2
Syllabus
(a) This issue, though framed by the Fourth Circuit as one of
standing, does not implicate the jurisdiction of the courts, as
petitioner satisfies both constitutional and prudential standing
requirements. What is at issue is whether petitioner is a "party"
for purposes of appealing the settlement approval, for only a
lawsuit's parties, or those that properly become parties, may
appeal an adverse judgment. This Court has never restricted the
right to appeal to named parties. Petitioner's interest in the
settlement approval is similar to those of the nonnamed parties
this Court has allowed to appeal in the past. He objected to the
settlement at the fairness hearing, as permitted by the Federal
Rules of Civil Procedure. And the settlement's approval
notwithstanding his objections amounted to a final decision of his
right or claim sufficient to trigger his right to appeal. That
right cannot be effectively accomplished through the named class
representative-once the named parties reach a settlement that is
approved over the petitioner's objections, petitioner's interests
diverge from those of the class representative.
Marino v.
Ortiz, 484 U.
S. 301, in which white police officers who were not members of
the class of minority officers who had brought a racial
discrimination suit were not allowed to appeal the settlement, is
not to the contrary. Although the settlement affected them, the
District Court's decision did not dispose of any right or claim
they might have had because they were not class members. Nor does
considering nonnamed class members as parties for the purpose of
bringing an appeal conflict with any other aspect of class action
procedure. Such members may be parties for some purposes and not
for others. What is important here is that they are parties in the
sense of being bound by the settlement. Allowing them to appeal a
settlement approval when they have objected at the fairness hearing
preserves their own interests in a settlement that will bind them,
despite their expressed objections before the trial court. Allowing
such appeals will not undermine the class action goal of preventing
multiple suits. Restricting the power to appeal to those members
who objected at the fairness hearing limits the class of potential
appellants considerably. Pp. 6-11.
(b) This Court rejects the Government's argument that class
members should be required to intervene for purposes of appeal. Nor
does the Court agree with the Government that the structure of
class action procedural rules requires intervention for purposes of
appeal. A procedure that allows nonnamed class members to object to
a settlement at the fairness hearing without first intervening
should similarly allow them to appeal the district court's decision
to disregard their objections. Moreover, no statute or procedural
rule directly addresses the question of who may appeal from
approval of class action settlements, while the
3
right to appeal from an action that finally disposes of one's
rights has a statutory basis. 28 U. S. C. § 1291. pp. 11-14.
265 F.3d
195, reversed and remanded.
O'CONNOR, J., delivered the opinion of the Court, in which
REHNQUIST, C. J., and STEVENS, SOUTER, GINSBURG, and BREYER, JJ.,
joined. SCALIA, J., filed a dissenting opinion, in which KENNEDY
and THOMAS, JJ., joined,
post, p. 15.
Thomas C.
Goldstein argued the cause for
petitioner.
With him on the briefs were
Erik S.
Jaffe and
Brian Wolfman.
Laurence Gold argued the cause for respondents. With him on the
brief were Andrew D. Roth, David L. Shapiro, William F. Hanrahan,
and Kenneth M. Johnson.
Patricia A. Millett argued the cause for the United States et
al. as amici curiae urging affirmance. On the brief were Solicitor
General Olson, Assistant Attorney General McCallum, Deputy
Solicitor General Kneedler, Gregory G. Garre, Marleigh D. Dover,
Irene M. Solet, David M. Becker, Jacob H. Stillman, and Eric
Summergrad.
*
JUSTICE O'CONNOR delivered the opinion of the Court. Petitioner,
a nonnamed member of a class certified under Federal Rule of Civil
Procedure 23(b)(1), sought to appeal the approval of a settlement
over objections he stated at the fairness hearing. The Court of
Appeals for the Fourth Circuit held that he lacked the power to
bring such an appeal because he was not a named class
representative and because
*Briefs of
amici curiae urging reversal were filed for
the Council of Institutional Investors by
Mark C.
Hansen and
Neil M. Gorsuch; and for Charles C.
Yeomans by
Katherine K. Yunker.
Seth P. Waxman, Edward C.
DuMont, and
Christopher R. Lipsett filed a brief for Citibank (South
Dakota), N. A., as
amicus curiae urging affirmance.
Thaddeus Holt filed a brief for Charles L. Grimes et al.
as
amici curiae.
4
he had not successfully moved to intervene in the litigation. We
now reverse.
I
Petitioner Robert Devlin, a retired worker represented by the
Transportation Communications International Union (Union),
participates in a defined benefits pension plan (Plan) administered
by the Union. In 1991, on the recommendation of the Plan's
trustees, the Plan was amended to add a cost of living adjustment
(COLA) for retired and active employees. As it turned out, however,
the Plan was not able to support such a large benefits increase. To
address this problem, the Plan's new trustees sought to freeze the
COLA. Because they were concerned about incurring Employee
Retirement Income Security Act of 1974 (ERISA) liability by
eliminating the COLA for retired workers, see 29 U. S. C. §
1054(g)(1) (1994 ed.) (providing that accrued benefits "may not be
decreased by an amendment of the plan"), the trustees froze the
COLA only as to active employees. Because the Plan still lacked
sufficient funds, the new trustees obtained an equitable decree
from the United States District Court for the District of Maryland
in 1995 declaring that the former trustees had breached their
fiduciary duties and that ending the COLA for retired workers would
not violate ERISA.
Scardelletti v.
Bobo, 897 F. Supp.
913 (Md. 1995);
Scardelletti v.
Bobo, No. JFM-95-52
(D. Md., Sept. 8, 1997). Accordingly, in a 1997 amendment, the new
trustees eliminated the COLA for all Plan members.
In October 1997, those trustees filed the present class action
in the United States District Court for the District of Maryland,
seeking a declaratory judgment that the 1997 amendment was binding
on all Plan members or, alternatively, that the 1991 COLA amendment
was void. Originally, petitioner was proposed as a class
representative for a subclass of retired workers because of his
previous involvement in the issue. He refused to become a named
representative, however, preferring to bring a separate action
in
5
the United States District Court for the Southern District of
New York, arguing, among other things, that the 1997 Plan amendment
violated the Age Discrimination in Employment Act of 1967, 81 Stat.
602, as amended, 29 U. S. C. § 621
et seq. (1994 ed. and
Supp. V). The New York District Court dismissed petitioner's claim
involving the 1997 amendment, which was later affirmed by the
Second Circuit because:
"The exact COLA issue that the appellants are pursuing ... is
being addressed by the district court in Maryland ... .It seems
eminently sensible that the Maryland district court should resolve
fully the COLA amendment issue." Devlin v. Transportation
Communications lnt'l Union, 175 F.3d
121, 132 (CA2 1999).
At the time petitioner's claim was dismissed, the District Court
in Maryland had already conditionally certified a class under
Federal Rule of Civil Procedure 23(b)(1), dividing it into two
subclasses: a subclass of active employees and a subclass of
retirees. On April 20, 1999, petitioner's attorney sent a letter to
the District Court informally seeking to intervene in the class
action. On May 12, 1999, petitioner sent another letter repeating
this request. He did not, however, formally move to intervene at
that time.
Also in May, the Plan's trustees and the class representatives
agreed on a settlement whereby the COLA benefits would be
eliminated in exchange for the addition of other benefits. On
August 27, 1999, the trustees filed a motion for preliminary
approval of the settlement. On September 10, 1999, petitioner
formally moved to intervene pursuant to Federal Rule of Civil
Procedure 24. On November 12, 1999, the District Court denied
petitioner's intervention motion as "absolutely untimely."
Scardelletti v.
Debarr, 265 F.3d
195,
201 (CA4 2001). It then heard objections to the
settlement, including those advanced by petitioner, and, concluding
that the settlement was fair, approved it. App. C to Pet. for
Cert.1-3.
6
Shortly thereafter, petitioner noted his appeal, challenging the
District Court's dismissal of his intervention motion as well as
its decision to approve the settlement. The Court of Appeals for
the Fourth Circuit affirmed the District Court's denial of
intervention under an abuse of discretion standard. 265 F. 3d, at
203-204. It further held that, because petitioner was not a named
representative of the class and because he had been properly denied
the right to intervene, he lacked standing to challenge the
fairness of the settlement on appeal.
Id., at 208-210.
Petitioner sought review of the Fourth Circuit's holding that he
lacked the ability to appeal the District Court's approval of the
settlement. We granted certiorari, 534 U. S. 1064 (2001), to
resolve a disagreement among the Circuits as to whether nonnamed
class members who fail to properly intervene may bring an appeal of
the approval of a settlement. Compare
Cook v.
Powell
Buick, Inc., 155 F.3d
758,
761 (CA5 1998) (holding that nonnamed class members
who have not successfully intervened may not appeal settlement
approval);
Gottlieb v.
Wiles, 11
F.3d 1004, 1008-1009 (CAlO 1993) (same);
Guthrie v.
Evans, 815 F.2d
626,628-629
(CAll 1987) (same);
Shults v.
Champion Int'l Corp., 35 F.3d
1056,
1061 (CA6 1994) (same), with
In re Paine Webber
Inc. Ltd. Partnerships Litigation, 94 F.3d
49,53
(CA2 1996) (any nonnamed class member who objected
at the fairness hearing may appeal);
Carlough v.
Amchem
Prods., Inc., 5 F.3d
707,
710 (CA3 1993) (same);
Marshall v.
Holiday Magic, Inc., 550 F. 2d 1173, 1176
(CA9 1977)
(same).
II
Although the Fourth Circuit framed the issue as one of standing,
265 F. 3d, at 204, we begin by clarifying that this issue does not
implicate the jurisdiction of the courts under Article III of the
Constitution. As a member of the retiree class, petitioner has an
interest in the settlement that creates a "case or controversy"
sufficient to satisfy the constitutional
7
requirements of injury, causation, and redressability.
Lujan v.
Defenders of Wildlife, 504 U. S. 555 (1992); see
also
In re Navigant Consulting, Inc., Securities Litigation,
275 F. 3d
616,620 (CA7 2001).
Nor do appeals by nonnamed class members raise the sorts of
concerns that are ordinarily addressed as a matter of prudential
standing. Prudential standing requirements include:
"[T]he general prohibition on a litigant's raising another
person's legal rights, the rule barring adjudication of generalized
grievances more appropriately addressed in the representative
branches, and the requirement that a plaintiff's complaint fall
within the zone of interests protected by the law invoked."
Allen v. Wright, 468 U. S. 737, 751 (1984).
Because petitioner is a member of the class bound by the
judgment, there is no question that he satisfies these three
requirements. The legal rights he seeks to raise are his own, he
belongs to a discrete class of interested parties, and his
complaint clearly falls within the zone of interests of the
requirement that a settlement be fair to all class members. Fed.
Rule Civ. Proc. 23(e).
What is at issue, instead, is whether petitioner should be
considered a "party" for the purposes of appealing the approval of
the settlement. We have held that "only parties to a lawsuit, or
those that properly become parties, may appeal an adverse
judgment."
Marino v.
Ortiz, 484 U. S. 301, 304 (1988)
(per curiam). Respondents argue that, because petitioner is
not a named class representative and did not successfully move to
intervene, he is not a party for the purposes of taking an
appeal.
We have never, however, restricted the right to appeal to named
parties to the litigation. In
Blossom v.
Milwaukee
& Chicago R. Co., 1 Wall. 655 (1864), for instance, we allowed
a bidder for property at a foreclosure sale, who was not a
8
named party in the foreclosure action, to appeal the refusal of
a request he made during that action to compel the sale. In
Hinckley v.
Gilman, c., & S.
R. Co.,
94 U. S. 467
(1877), we allowed a receiver, who was an officer of the court
rather than a named party to the case, to appeal from an order
"relat[ing] to the settlement of his accounts," reasoning that
"[f]or this purpose he occupies the position of a party to the
suit."
Id., at 469. More recently, we have affirmed that
"[t]he right of a nonparty to appeal an adjudication of contempt
cannot be questioned,"
United States Catholic Conference v.
Abortion Rights Mobilization, Inc., 487 U. S. 72, 76 (1988),
given the binding nature of that adjudication upon the interested
nonparty.
JUSTICE SCALIA attempts to distinguish these cases by
characterizing them as appeals from collateral orders to which the
appellants
"were parties."
Post, at 16 (dissenting
opinion). But it is difficult to see how they were parties in the
sense in which JUSTICE SCALIA uses the term-those "'named as a
party to an action,'" usually "'in the caption of the summons or
complaint.'"
Post, at 15 (quoting Restatement (Second) of
Judgments § 34(1), p. 345 (1980);
id., Comment
a,
Reporter's Note, at 347). Because they were not named in the
action, the appellants in these cases were parties only in the
sense that they were bound by the order from which they were
seeking to appeal.
Petitioner's interest in the District Court's approval of the
settlement is similar. Petitioner objected to the settlement at the
District Court's fairness hearing, as nonnamed parties have been
consistently allowed to do under the Federal Rules of Civil
Procedure. See Fed. Rule Civ. Proc. 23(e) ("A class action shall
not be dismissed or compromised 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");
see also 2 H. Newberg & A. Conte, Class Actions § 11.55, p.
11-132 (3d ed. 1992) (explaining that Rule 23(e) entitles all class
members
9
to an opportunity to object). The District Court's approval of
the settlement-which binds petitioner as a member of the
class-amounted to a "final decision of [petitioner's] right or
claim" sufficient to trigger his right to appeal. See
Williams v.
Morgan, 111 U. S. 684, 699 (1884)
(describing the cases discussed above). And like the appellants in
the prior cases, petitioner will only be allowed to appeal that
aspect of the District Court's order that affects him-the District
Court's decision to disregard his objections. Cf.
supra, at
6. Petitioner's right to appeal this aspect of the District Court's
decision cannot be effectively accomplished through the named class
representative-once the named parties reach a settlement that is
approved over petitioner's objections, petitioner's interests by
definition diverge from those of the class representative.
Marino v.
Ortiz, supra, is not to the contrary. In
that case, we refused to allow an appeal of a settlement by a group
of white police officers who were not members of the class of
minority officers that had brought a racial discrimination claim
against the New York Police Department. Although the settlement
affected them, the District Court's decision did not finally
dispose of any right or claim they might have had because they were
not members of the class.
Nor does considering nonnamed class members parties for the
purposes of bringing an appeal conflict with any other aspect of
class action procedure. In a related case, the Seventh Circuit has
argued that nonnamed class members cannot be considered parties for
the purposes of bringing an appeal because they are not considered
parties for the purposes of the complete diversity requirement in
suits under 28 U. S. C. § 1332. See
Navigant Consulting, 275
F. 3d, at 619; see also
Snyder v.
Harris, 394 U. S. 332, 340
(1969). According to the Seventh Circuit, "[c]lass members cannot
have it both ways, being non-parties (so that more cases can come
to federal court) but still having a party's ability to litigate
independently." 275 F. 3d, at 619. Nonnamed class mem-
10
bers, however, may be parties for some purposes and not for
others. The label "party" does not indicate an absolute
characteristic, but rather a conclusion about the applicability of
various procedural rules that may differ based on context.
Nonnamed class members are, for instance, parties in the sense
that the filing of an action on behalf of the class tolls a statute
of limitations against them. See
American Pipe & Constr.
Co. v.
Utah, 414 U. S. 538 (1974).
Otherwise, all class members would be forced to intervene to
preserve their claims, and one of the major goals of class action
litigationto simplify litigation involving a large number of class
members with similar claims-would be defeated. The rule that
nonnamed class members cannot defeat complete diversity is likewise
justified by the goals of class action litigation. Ease of
administration of class actions would be compromised by having to
consider the citizenship of all class members, many of whom may
even be unknown, in determining jurisdiction. See 7 A C. Wright, A.
Miller, & M. Kane, Federal Practice and Procedure § 1755, pp.
63-64 (2d ed. 1986). Perhaps more importantly, considering all
class members for these purposes would destroy diversity in almost
all class actions. Nonnamed class members are, therefore, not
parties in that respect.
What is most important to this case is that nonnamed class
members are parties to the proceedings in the sense of being bound
by the settlement. It is this feature of class action litigation
that requires that class members be allowed to appeal the approval
of a settlement when they have objected at the fairness hearing. To
hold otherwise would deprive nonnamed class members of the power to
preserve their own interests in a settlement that will ultimately
bind them, despite their expressed objections before the trial
court. Particularly in light of the fact that petitioner had no
ability to opt out of the settlement, see Fed. Rule Civ. Proc.
23(b)(1), appealing the approval of the settlement is petitioner's
only
11
means of protecting himself from being bound by a disposition of
his rights he finds unacceptable and that a reviewing court might
find legally inadequate.
JUSTICE SCALIA rightly notes that other nonnamed parties may be
bound by a court's decision, in particular, those in privity with
the named party. See
post, at 18. True enough. It is not at
all clear, however, that such parties may not themselves appeal.
Although this Court has never addressed the issue, nonnamed parties
in privity with a named party are often allowed by other courts to
appeal from the order that affects them. 5 Am. Jur. 2d, Appellate
Review § 265 (1995).
Respondents argue that, nonetheless, appeals from nonnamed
parties should not be allowed because they would undermine one of
the goals of class action litigation, namely, preventing multiple
suits. See
Guthrie v.
Evans, 815 F. 2d, at 629
(arguing that allowing nonnamed class members' appeals would
undermine a "fundamental purpose of the class action": "to render
manageable litigation that involves numerous members of a
homogenous class, who would all otherwise have access to the court
through individual lawsuits"). Allowing such appeals, however, will
not be as problematic as respondents claim. For one thing, the
power to appeal is limited to those nonnamed class members who have
objected during the fairness hearing. This limits the class of
potential appellants considerably. As the longstanding practice of
allowing nonnamed class members to object at the fairness hearing
demonstrates, the burden of considering the claims of this subset
of class members is not onerous.
III
The Government, as
amicus curiae, admits that nonnamed
class members are parties who may appeal the approval of a
settlement, but urges us nonetheless to require class members to
intervene for purposes of appeal. See Brief for
12
United States et al. as
Amici Curiae 12-27. To address
the fairness concerns to objecting nonnamed class members bound by
the settlement they wish to appeal, however, the Government also
asserts that such a limited purpose intervention generally should
be available to all those, like petitioner, whose objections at the
fairness hearing have been disregarded. Federal Rule of Civil
Procedure 24(a)(2) provides for intervention as of right:
"Upon timely application ... when the applicant claims an
interest relating to the property or transaction which is the
subject of the action and the applicant is so situated that the
disposition of the action may as a practical matter impair or
impede the applicant's ability to protect that interest, unless the
applicant's interest is adequately represented by existing
parties."
According to the Government, nonnamed class members who state
objections at the fairness hearing should easily meet these three
criteria. For one thing, it claims, a settlement binding on them
will establish the requisite interest in the action. Moreover, it
argues, any intervention motion filed "within the time period in
which the named plaintiffs could have taken an appeal" should be
considered "timely filed" for the purposes of such limited
intervention.
United Airlines, Inc. v.
McDonald,
432 U. S. 385,
396 (1977). Finally, it asserts, the approval of a settlement over
a nonnamed class member's objection, and the failure of a class
representative to appeal such an approval, should "invariably" show
that the class representative does not adequately represent the
nonnamed class member's interests on appeal. Brief for United
States et al. as
Amici Curiae 20.
Given the ease with which nonnamed class members who have
objected at the fairness hearing could intervene for purposes of
appeal, however, it is difficult to see the value of the
Government's suggested requirement. It identifies only
13
a limited number of instances where the initial intervention
motion would be of any use: where the objector is not actually a
member of the settlement class or is otherwise not entitled to
relief from the settlement, where an objector seeks to appeal even
though his objection was successful, where the objection at the
fairness hearing was untimely, or where there is a need to
consolidate duplicative appeals from class members.
Id., at
23-25. In such situations, the Government argues, a district court
can disallow such problematic and unnecessary appeals.
This seems to us, however, of limited benefit. In the first two
of these situations, the objector stands to gain nothing by appeal,
so it is unlikely such situations will arise with any frequency.
JUSTICE SCALIA argues that if such objectors were undeterred by
this fact at the time they filed their original objections, they
will be undeterred at the appellate level. See
post, at
21-22. This misunderstands the point. As to the first group-those
who are not actually entitled to relief-one would not expect them
to have filed objections in the district court in the first place.
The few irrational persons who wish to pursue one round of
meaningless relief will, we agree, probably be irrational enough to
pursue a second. But there should not be many of such persons in
any case. As for the second-those whose objections were successful
at the district court level-they were far from irrational in the
filing of their initial objections, and they should not generally
be expected to lose this level of sensibility when faced with the
prospect of a meaningless appeal. Moreover, even if such cases did
arise with any frequency, such concerns could be addressed by a
standing inquiry at the appellate level.
The third situation-dealing with untimely objectionsimplicates
basic concerns about waiver and should be easily addressable by a
court of appeals. A court of appeals also has the ability to avoid
the fourth by consolidating cases rais-
14
ing duplicative appeals. Fed. Rule App. Proc. 3(b)(2). If the
resolution of any of these issues should turn out to be complex in
a given case, there is little to be gained by requiring a district
court to consider these issues, which are the type of issues
(standing to appeal, waiver of objections below, and consolidation
of appeals) typically addressed only by an appellate court. As such
determinations still would most likely lead to an appeal, such a
requirement would only add an additional layer of complexity before
the appeal of the settlement approval may finally be heard.
Nor do we agree with the Government that, regardless of the
desirability of an intervention requirement for effective class
management, the structure of the rules of class action procedure
requires intervention for the purposes of appeal. According to the
Government, intervention is the method contemplated under the rules
for nonnamed class members to gain the right to participate in
class action proceedings. We disagree. Just as class action
procedure allows nonnamed class members to object to a settlement
at the fairness hearing without first intervening, see
supra, at 8-9, it should similarly allow them to appeal the
District Court's decision to disregard their objections. Moreover,
no federal statute or procedural rule directly addresses the
question of who may appeal from approval of class action
settlements, while the right to appeal from an action that finally
disposes of one's rights has a statutory basis. 28 U. s. C. §
1291.
IV
We hold that nonnamed class members like petitioner who have
objected in a timely manner to approval of the settlement at the
fairness hearing have the power to bring an appeal without first
intervening. We therefore reverse the judgment of the Court of
Appeals for the Fourth Circuit and remand the case for further
proceedings consistent with this opinion.
It is so ordered.
15
JUSTICE SCALIA, with whom JUSTICE KENNEDY and JUSTICE THOMAS
join, dissenting.
"The rule that only parties to a lawsuit, or those that properly
become parties, may appeal an adverse judgment, is well settled."
Marino v.
Ortiz, 484 U. S. 301, 304 (1988)
(per curiam); Fed. Rule App. Proc. 3(c)(1) ("The notice of
appeal must ... specify the party or parties taking the appeal").
This is one well-settled rule that, thankfully, the Court leaves
intact. Other chapters in the hornbooks are not so lucky.
I
The Court holds that petitioner, a nonnamed member of the class
in a class action litigated by a representative member of the
class, is a "party" to the judgment approving the class settlement.
This is contrary to well-established law. The "parties" to a
judgment are those named as suchwhether as the original plaintiff
or defendant in the complaint giving rise to the judgment, or as
"[o]ne who [though] not an original party ... become[s] a party by
intervention, substitution, or third-party practice,"
Karcher v.
May, 484 U. S. 72, 77 (1987). As the
Restatement puts it, "[a] person who is named as a party to an
action and subjected to the jurisdiction of the court is a party to
the action," Restatement (Second) of Judgments § 34(1), p. 345
(1980) (hereinafter Restatement); "[t]he designation of persons as
parties is usually made in the caption of the summons or complaint
but additional parties may be named in such pleadings as a
counterclaim, a complaint against a third party filed by a
defendant, or a complaint in intervention,"
id., § 34,
Comment
a, Reporter's Note, at 347. As was the case here,
the only members of a class who are typically named in the
complaint are the class representatives; thus, it is only these
members of the class, and those who intervene or otherwise enter
through third-party practice, who are parties to the class
judgment. This is confirmed by the application of those Federal
Rules of Civil Procedure that confer upon
16
"parties" to the litigation the rights to take such actions as
conducting discovery and moving for summary judgment,
e.
g., Fed. Rules Civ. Proc. 30(a)(1), 31(a)(1), 33(a), 34(a),
36(a), 45(a)(3), 56(a), 56(b), 56(e). It is undisputed that the
class representatives are the only members of the class who have
such rights.
Petitioner was offered the opportunity to be named the class
representative, but he declined; nor did he successfully intervene.
Ante, at 4, 5. Accordingly, he is not a party to the class
judgment.
A
The Court does not deny that, at least as a general matter, only
those persons named as such are the "parties." Rather, it contends
that persons "may be parties for some purposes and not for others,"
ante, at 10, and that petitioner is a party to the class
judgment at least for the "purposes of appealing,"
ante, at
7.1 The Court bases these contentions on three of our precedents,
which it says stand for the proposition that "[w]e have never ...
restricted the right to appeal to named parties to the litigation."
Ibid. These precedents stand for nothing of the sort.
All of these precedents are perfectly consistent with the rule
that only named parties to a judgment can appeal the judgment
because they involved appeals not from judgments but from
collateral orders. The appellants were allowed to appeal from the
collateral orders to which they
were parties,
1 The Court provides only one other example of a purpose for
which a nonnamed class member is purportedly a "party": we have, it
says, tolled the statute of limitations for such a person between
the time the class action is filed and the time class certification
is denied.
Ante, at 10 (citing
American Pipe &
Constr. Co. v.
Utah, 414 U. S. 538 (1974)).
Not even petitioner, however, is willing to advance the novel and
surely erroneous argument that a nonnamed class member is a party
to the class-action litigation
before the class is
certified. Brief for Petitioner 24-26. This lonesome example
is, in other words, entirely irrelevant to the question of party
status.
17
even though they were
not named parties to (and hence
would not have been able to appeal from) the underlying judgments.
We made this distinction between appealing the judgment and
appealing a collateral order quite explicit in
Blossom v.
Milwaukee &
Chicago R. Co., 1 Wall. 655 (1864).
In that case, the appellant was not a named party to the underlying
foreclosure decree, from which it was therefore "certainly true
that he [could not] appeal," yet he was a party (obviously, as the
movant) to the motion he filed asking the court to complete the
foreclosure sale, and therefore could appeal from
the order
denying that motion. Ibid. Our decisions in
Hinckley v.
Gilman, c., & S.
R. Co., 94 U. S. 467 (1877), and
United States Catholic Conference v.
Abortion Rights
Mobilization, Inc., 487 U. S. 72 (1988), are
to the same effect. In the former, the appellant was not a named
party to the underlying foreclosure decree, from which we said he
"cannot and does not attempt to appeal," but he was obviously a
party to the collateral order directing him by name to transfer
funds to the court, from which we said he could appeal. 94 U. S.,
at 469. In the latter, witnesses who had been dismissed as named
parties to the underlying litigation, 487 U. S., at 75, were
allowed to appeal from a collateral order holding them in contempt
for their failure to comply with a subpoena addressed to them (and
to which they were therefore obviously parties),
id., at 76.
These cases demonstrate why, even though petitioner should not be
able to appeal the District Court's judgment approving the class
settlement, there is no dispute that petitioner could (and did)
appeal the District Court's collateral order denying his motion to
intervene; as the movant, he was a party to the latter. See
Marino, 484 U. S., at 304 ("[S]uch motions are, of course,
appealable").2
2 The Court finds it "difficult" to understand how the
appellants in these cases can be considered parties in the
traditional sense because they were not named in the "summons or
complaint."
Ante, at 8 (internal quotation marks omitted).
Quite so. Our whole point is that, in order to appeal a
18
B
The Court's other grounds for holding that petitioner is a party
to the class judgment are equally weak. First, it contends that
petitioner should be considered a party to the judgment because, as
a member of the class, he is bound by it.
Ante, at 10 ("What
is most important to this case is that nonnamed class members are
parties to the proceedings in the sense of being bound by the
settlement"). This will come as news to law students everywhere.
There are any number of persons who are not parties to a judgment
yet are nonetheless bound by it. See Restatement § 41(1), at 393
(listing examples);
id., § 75, Comment
a, at 210 ("A
person is bound by a judgment in an action to which he is not a
party if he is in 'privity' with a party"). Perhaps the most
prominent example is precisely the one we have here. Nonnamed
members of a class are bound by the class judgment, even though
they are not parties to the judgment, because they are represented
by class members who are parties:
"A person who is not a party to an action but who is represented
by a party is bound by and entitled to the benefits of a judgment
as though he were a party. A person is represented by a party who
is ... [t]he representative of a class of persons similarly
situated, designated as such with the approval of the court, of
which the person is a member." Id., § 41(1)(e), at 393.
Accord,
id., § 75, Comment
a, at 210 ("Persons
bound through representation by virtue of a relationship with a
party are to be contrasted with persons bound by a judgment because
they are parties ... "). Petitioner here, in the words of the
Restatement, "is not a party" but "is bound by [the] judg-
collateral order, one need not be a party to the underlying
litigation (and therefore need not be named in the complaint giving
rise to that litigation), but need only be a party to the
collateral proceedings (and therefore need only be named in
the filings giving rise to those proceedings).
19
ment as though he were a party." Because our "wellsettled" rule
allows only "parties" to appeal from a judgment, petitioner may not
appeal the class settlement.3
Second, the Court contends that petitioner should be considered
a party to the judgment because he filed an objection to the class
settlement. We have already held, however, that filing an objection
does
not make one a party if he does not also intervene.
Marino, supra, at 304.
II
The most pernicious aspect of to day's decision, however, is not
its result, but its reasoning. I mentioned in a recent dissent the
Court's "penchant for eschewing clear rules that might avoid
litigation,"
US Airways, Inc. v.
Barnett, 535 U. S.
391, 412 (2002). Today's opinion not only eschews such
3 The Court contends that those in privity with the parties to a
judgment are "often allowed by other courts" to appeal by mere
virtue of the fact that they are bound by the judgment.
Ante, at 11 (citing 5 Am. Jur. 2d § 265 (1995)). I should
think that the significant datum on this point is not that such
appeals have been "often allowed by other courts," but that they
have
never been allowed by this Court. Indeed, the "other
courts" whose opinions are cited by the authority on which the
Court relies consist
entirely of state courts, with the
exception of one federal case decided before our decision in
Marino v.
Ortiz, 484 U. S. 301 (1988)
(per curiam), which affirmed the "well-settled" rule that in
federal court "only parties to a lawsuit ... may appeal an adverse
judgment."
Id., at 304. While this difference between the
procedures of federal and state courts seemingly escapes the
Court's attention, it was well enough recognized (and the clear
federal rule acknowledged) in the very next paragraph of the
American Jurisprudence annotation on which the Court relies:
"Caution: Applicable rules of procedure may bar a
nonparty from taking an appeal notwithstanding his or her interest
in the subject matter of the case. Thus, the United States Supreme
Court has, under the Federal Rules of Appellate Procedure, rejected
the principle of permitting appeal by a nonparty who has an
interest affected by the trial court's judgment, stating that the
better practice is for such nonparty to seek intervention for the
purposes of appeal." 5 Am. Jur. 2d, Appellate Review § 265, at 40
(citing
Marino, supra).
20
a rule; it destroys one that previously existed. It abandons the
bright-line rule that only those persons named as such are parties
to a judgment, in favor of a vague inquiry "based on context."
Ante, at 10 ("The label 'party' does not indicate an
absolute characteristic, but rather a conclusion about the
applicability of various procedural rules that may differ based on
context"). Although the Court does not say how one goes about
selecting the result-determinative "context" for its
oh-so-sophisticated new inquiry, I gather from its repeated
invocation of this phrase that the relevant context in the present
case is the "goals of class action litigation,"
ante, at 10,
11. This means, I suppose, that, in a labor case, who are the
parties to a judgment will depend on the goals of the labor laws,
and, in a First Amendment case, who are the parties to a judgment
will depend on the goals of the First Amendment. Or perhaps
not.
What makes this exponential increase in indeterminacy especially
unfortunate is the fact that it is utterly unnecessary. Despite the
Court's assertion in one breath that treating nonnamed class
members as parties is the "only means" by which they would not be
"deprive[d] ... of the power to preserve their ... interests,"
ante, at 10, the Court in the next breath concedes that
there is another-and very easymeans for nonnamed class members to
do just that: becoming parties to the judgment by moving to
intervene.
Ante, at 12 (noting "the ease with which nonnamed
class members who have objected at the fairness hearing could
intervene for purposes of appeal"). The Court does not dispute that
nonnamed class members will typically meet the requirements for
intervention as of right under Federal Rule of Civil Procedure 24,
including intervention only for the purpose of appeal, and even
after the class judgment has been entered.4
Ante, at
11-12.
4 It is true that petitioner's motion to intervene was denied as
untimely by the District Court. Even if this decision was correct,
a question on which petitioner did not seek certiorari, it does not
cast doubt on the
21
The Court
does dispute whether there is any "value" in
requiring nonnamed class members who object to the settlement to
intervene in order to take an appeal.
Ante, at 12. In my
view, avoiding the reduction to indeterminacy of the hitherto clear
rule regarding who is a party is "value" enough. But beyond that,
it makes sense to require objectors to intervene before appealing,
for the reason advanced by the Government: to enable district
courts "to perform an important screening function." Brief for
United States et al. as
Amici Curiae 23. For example, when
considering whether to allow an objector to intervene, a district
court can verify that the objector does not fall outside the
definition of the settlement class and is otherwise entitled to
relief in the class action, that the objection has not already been
resolved in favor of the objector in the approved settlement, and
that the objection was presented in a timely manner.
Id., at
23-24. The Court asserts that there is no "value" to these
screening functions because a court of appeals can pass on those
matters just as easily, and in any event an objector who is unable
to obtain relief from the class settlement will not seek to appeal
"with any frequency," as he "stands to gain nothing by appeal."
Ante, at 13.
As to the last point: The person who has nothing to gain from an
appeal also had nothing to gain from filing his objection in the
first place, but was undeterred (as many are), see,
e.
g., Shaw v.
Toshiba American Information Systems,
Inc., 91 F. Supp. 2d 942, 973-974, and nn. 17-18 (ED Tex.
2000). The belief that meritless objections, undeterred the first
time, will be deterred the second, surely suggests the tri-
ability of the ordinary nonnamed class member to intervene for
purposes of appeal. Petitioner was
not the ordinary nonnamed
class member seeking intervention for purposes of appeal. He moved
to intervene
generally, Brief for Petitioner 6,
despite having rejected invitations to participate in the
litigation until after the settlement was preliminarily
approved.
22
umph of hope over experience.5 And as for the suggestion that
the court of appeals can pass on these questions just as easily:
Since when has it become a principle of our judicial administration
that what
can be left to the appellate level
should
be left to the appellate level? Quite the opposite is true.
District judges, who issue their decrees in splendid isolation, can
be multiplied
ad infinitum. Courts of appeals cannot be
staffed with too many judges without destroying their ability to
maintain, through en banc rehearings, a predictable law of the
circuit. In any event, the district court, being intimately
familiar with the facts,
is in a better position to rule
initially upon such questions as whether the objections to the
settlement were procedurally deficient, late filed, or simply
inapposite to the case. If it denies interventions on such grounds,
and if the denials are not appealed, the court of appeals will be
spared the trouble of considering those objections altogether. And
even when the denials are appealed, the court of appeals will have
the benefit of the district court's opinion on these often
fact-bound questions. (Typically, the only occasion the district
court would have had to pass on these questions is in the course of
considering the motion to intervene; when considering whether to
approve the class settlement, district courts typically do not
treat objections individually even on substance, let alone form.
E. g., id., at 973-974.) Finally, it is worth observing that
the Court's assertions regarding the merits of allowing objectors
to appeal a class settlement without intervening apply with equal
force to the objectors who sought to appeal
5 The Court assures us that these appeals will be "few" because,
like the objections on which they are based, they are "irrational."
Ante, at 13. To say that the substance of an objection (and
of the corresponding appeal) is irrational is not to say that it is
irrational to make the objection and file the appeal. See
Shaw, 91 F. Supp. 2d, at 973-974, and n. 18 (noting
"'canned' objections filed by professional objectors who seek out
class actions to simply extract a fee by lodging generic, unhelpful
protests"). The Court cites nothing to support its sunny surmise
that the appeals will be few.
23
the class judgment in
Marino. Yet there we concluded (no
doubt for the reasons discussed above) that "the better practice"
is to require objectors "to seek intervention for purposes of
appeal." 484 U. S., at 304.
For these reasons, I would affirm the Court of Appeals.
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