Petitioners
Amchem Products and 19 other companies
Respondents
George Windsor and other individuals
Petitioners' Claim
Appellants desired to settle a large class-action suit with a number of individuals and families; respondents in this case were a group of persons involved in the suit who objected to the settlement under Rule 23 of the Federal Rules of Civil Procedure.
Justices for the Court
Ruth Bader Ginsburg (writing for the Court), Anthony M. Kennedy, William H. Rehnquist, Antonin Scalia, David H. Souter, Clarence Thomas
Justices Dissenting
Stephen Breyer, John Paul Stevens, (Sandra Day O'Connor did not participate)
Place
Washington, D.C.
Date of Decision
25 June 1997
Decision
That the "sprawling class" represented in the large class-action settlement did not constitute a class at all under Rule 23.
Significance
On the level of events current to the Court's ruling in Amchem Products, the decision was significant in that it helped further define the framework for a number of large class-action suits that were due to become an increasingly prominent part of legal life in the following years. Examples of such cases include not only those involving asbestos manufacturers, but also casesrelating to silicone breast implants and, perhaps most important of all, tobacco companies. But in a larger sense, Amchem signalled the Court's determination to stand by the constitutional separation of powers, thus leavingthe resolution of certain matters involving asbestos litigation to Congress--even though it might "speed things up" for the courts to take matters into their own hands.
Beginning in the 1970s, there was a series of lawsuits in the United States involving asbestos, a product used widely from the 1930s through the 1950s because of its fire-resistant qualities. Exposure to asbestos was found to causecancer and other fatal diseases, such as asbestosis, and since these diseases sometimes had a latency period of several decades before they made themselves known, litigation over asbestos continued long after the product ceased tobe used.
By the 1980s and 1990s, a glut of asbestos litigation had begun to form within the courts, slowing down the pace of operations of the American legal system, according to the finding of the United States Judicial Conference Ad Hoc Committee on Asbestos Litigation, which was appointed by the Supreme Court chief justice in September of 1990. The committee recommended that Congress formits own agency to resolve disputes over asbestos claims, but by the mid-1990s, Congress had taken no such action. Instead, the federal courts had put allasbestos complaints into a single judicial district, the U.S. District Courtfor the Eastern District of Pennsylvania.
Once the cases were consolidated, the lines were drawn. On the one side was aconsortium of 20 companies, including Amchem Products, called the Counsel for the Center for Claims Resolution (CCR.) On the other were the individuals,and families of individuals, who had claims against such companies, represented by attorneys Ronald L. Motley, Gene Locks, and Joseph F. Rice. Starting inNovember of 1991, CCR attempted to get agreement from the plaintiffs for anomnibus offer which would settle a large proportion, if not all, of the present and future asbestos-related cases. After some negotiation, the settlementoffer was narrowed down to focus solely on claims that had not yet entered litigation. In the negotiations, attorneys for persons with cases pending alsoendeavored to represent those with future cases, which would later be judgeda conflict of interest.
Once CCR had settled, for some $200 million, the claims of those with cases pending (so-called "inventory claimants"), it instituted the settlement in question in Amchem Products. On 15 January 1993, CCR and the attorneys for the plaintiff presented the Pennsylvania district court judge with the complaint, answer, proposed settlement agreement, and joint motion for conditional class certification. Thus there would be no litigation, and the aim was tosettle the matter as quickly as possible. Nine lead plaintiffs were identified in the complaint, which stated that these represented all persons in the plaintiff class, which had no subclasses. Under the terms of the settlement, all claims not filed before 15 January 1993 would be settled in terms that didnot adjust future payments for inflation, and which capped the number of claims payable annually.
Clearly such an offer was in CCR's best interests, but many of the plaintiffswere eager to take it as well. A number of plaintiffs, however, opted out ofthe settlement, and so informed Judge Reed, who had been appointed by the head trial judge, Judge Weiner, to review the fairness of the proceedings. Nonetheless, the district court found that the case met the requirements of Rule23 of the Federal Rules of Civil Procedure, which makes stipulations regarding the number of persons involved in a class-action suit, the commonality of their claims, and the preponderance of such claims within the class.
The objectors, however, took the case--which up to this point had the name Georgine v. Amchem Products, Inc. to the U.S. Court of Appeals for the Third Circuit. The latter vacated the lower court's certification, holding that the requirements of Rule 23 had not been satisfied.
The Proper Question of Class Certification
When CCR took the case to the Supreme Court, its claim was that the objectorshad no case. But the Court, which upheld the appeals court's ruling, found that it was the settlement offer itself which lacked proper legal standing. Justice Ginsburg gave the opinion for the Court, in which Chief Justice Rehnquist and Justices Scalia, Kennedy, Souter, and Thomas joined. In it she outlined the elements of Rule 23, which had taken shape with a 1966 revision which delineated conditions to be met before a class could be certified for a classaction suit.
Principal among the concerns outlined in parts (a) and (b) of Rule 23, Ginsburg noted, are questions as to whether the proposed group has sufficient unityof claims to constitute a class. The importance of these questions remains even when settlement, rather than trial, is proposed. A "common interest" alone would not satisfy the predominance requirement of Rule 23(b)(3), she said,since that amounts to a virtual redundancy. In fact, "No settlement class called to the Court's attention is as sprawling as the one certified here."
Turning to the adequate representation clause of Rule 23, in section (a)(4),Ginsburg again found the class wanting, as there were conflicts of interest,as noted above. "Representatives must be part of the class and possess the same interest and suffer the same injury as the class members," she said; otherwise, by definition, they are not representative. In the case of "the currently injured, the goal is generous immediate payments." But this is clearly notin the interest of those not currently injured, who may find in another decade or so that they are suffering serious--and expensive--injuries.
Given that the class referred to in the so-called class action suit was not aclass at all as defined in Rule 23, the Court saw no need to rule on the adequacy of the notice given within the suit itself, which was the original basis for the case being brought to the Court's attention. As to the need suggested earlier by the investigating committee, that Congress take action by appointing a "nationwide claims processing regime," the Court noted that this wasup to the legislative body, which had so far taken no action. But Rule 23 simply "cannot carry the large load the settling parties and the District Courtheaped upon it."
Breyer Urges Action
Justice Breyer, in an opinion with which Justice Stevens joined, concurred inpart and dissented in part. He agreed with the Court's basic stance that thesettlement offer itself was a relevant factor to use in considering whethera group constituted a class; however, as he said, he found "several problemswith the approach which lead me to a different conclusion."
In Breyer's view, the need for a settlement in the case made it extremely important for the Court to go ahead and allow such a settlement to take place. Furthermore, in looking at the settlement offer itself, he saw more commonality in the claimants than the rest of the Court did. As for the question of conflict of interest in representation, to Breyer it appeared that the Court wastrying to "second-guess" the court of appeals, without allowing that court to consider that particular question. Generally, Breyer viewed the settlementas fair, and therefore, "in the absence of further review by the Court of Appeals, I cannot accept the majority's suggestions that `notice' is inadequate."
Related Cases
Amchem Products and 19 other companies
Respondents
George Windsor and other individuals
Petitioners' Claim
Appellants desired to settle a large class-action suit with a number of individuals and families; respondents in this case were a group of persons involved in the suit who objected to the settlement under Rule 23 of the Federal Rules of Civil Procedure.
Justices for the Court
Ruth Bader Ginsburg (writing for the Court), Anthony M. Kennedy, William H. Rehnquist, Antonin Scalia, David H. Souter, Clarence Thomas
Justices Dissenting
Stephen Breyer, John Paul Stevens, (Sandra Day O'Connor did not participate)
Place
Washington, D.C.
Date of Decision
25 June 1997
Decision
That the "sprawling class" represented in the large class-action settlement did not constitute a class at all under Rule 23.
Significance
On the level of events current to the Court's ruling in Amchem Products, the decision was significant in that it helped further define the framework for a number of large class-action suits that were due to become an increasingly prominent part of legal life in the following years. Examples of such cases include not only those involving asbestos manufacturers, but also casesrelating to silicone breast implants and, perhaps most important of all, tobacco companies. But in a larger sense, Amchem signalled the Court's determination to stand by the constitutional separation of powers, thus leavingthe resolution of certain matters involving asbestos litigation to Congress--even though it might "speed things up" for the courts to take matters into their own hands.
Beginning in the 1970s, there was a series of lawsuits in the United States involving asbestos, a product used widely from the 1930s through the 1950s because of its fire-resistant qualities. Exposure to asbestos was found to causecancer and other fatal diseases, such as asbestosis, and since these diseases sometimes had a latency period of several decades before they made themselves known, litigation over asbestos continued long after the product ceased tobe used.
By the 1980s and 1990s, a glut of asbestos litigation had begun to form within the courts, slowing down the pace of operations of the American legal system, according to the finding of the United States Judicial Conference Ad Hoc Committee on Asbestos Litigation, which was appointed by the Supreme Court chief justice in September of 1990. The committee recommended that Congress formits own agency to resolve disputes over asbestos claims, but by the mid-1990s, Congress had taken no such action. Instead, the federal courts had put allasbestos complaints into a single judicial district, the U.S. District Courtfor the Eastern District of Pennsylvania.
Once the cases were consolidated, the lines were drawn. On the one side was aconsortium of 20 companies, including Amchem Products, called the Counsel for the Center for Claims Resolution (CCR.) On the other were the individuals,and families of individuals, who had claims against such companies, represented by attorneys Ronald L. Motley, Gene Locks, and Joseph F. Rice. Starting inNovember of 1991, CCR attempted to get agreement from the plaintiffs for anomnibus offer which would settle a large proportion, if not all, of the present and future asbestos-related cases. After some negotiation, the settlementoffer was narrowed down to focus solely on claims that had not yet entered litigation. In the negotiations, attorneys for persons with cases pending alsoendeavored to represent those with future cases, which would later be judgeda conflict of interest.
Once CCR had settled, for some $200 million, the claims of those with cases pending (so-called "inventory claimants"), it instituted the settlement in question in Amchem Products. On 15 January 1993, CCR and the attorneys for the plaintiff presented the Pennsylvania district court judge with the complaint, answer, proposed settlement agreement, and joint motion for conditional class certification. Thus there would be no litigation, and the aim was tosettle the matter as quickly as possible. Nine lead plaintiffs were identified in the complaint, which stated that these represented all persons in the plaintiff class, which had no subclasses. Under the terms of the settlement, all claims not filed before 15 January 1993 would be settled in terms that didnot adjust future payments for inflation, and which capped the number of claims payable annually.
Clearly such an offer was in CCR's best interests, but many of the plaintiffswere eager to take it as well. A number of plaintiffs, however, opted out ofthe settlement, and so informed Judge Reed, who had been appointed by the head trial judge, Judge Weiner, to review the fairness of the proceedings. Nonetheless, the district court found that the case met the requirements of Rule23 of the Federal Rules of Civil Procedure, which makes stipulations regarding the number of persons involved in a class-action suit, the commonality of their claims, and the preponderance of such claims within the class.
The objectors, however, took the case--which up to this point had the name Georgine v. Amchem Products, Inc. to the U.S. Court of Appeals for the Third Circuit. The latter vacated the lower court's certification, holding that the requirements of Rule 23 had not been satisfied.
The Proper Question of Class Certification
When CCR took the case to the Supreme Court, its claim was that the objectorshad no case. But the Court, which upheld the appeals court's ruling, found that it was the settlement offer itself which lacked proper legal standing. Justice Ginsburg gave the opinion for the Court, in which Chief Justice Rehnquist and Justices Scalia, Kennedy, Souter, and Thomas joined. In it she outlined the elements of Rule 23, which had taken shape with a 1966 revision which delineated conditions to be met before a class could be certified for a classaction suit.
Principal among the concerns outlined in parts (a) and (b) of Rule 23, Ginsburg noted, are questions as to whether the proposed group has sufficient unityof claims to constitute a class. The importance of these questions remains even when settlement, rather than trial, is proposed. A "common interest" alone would not satisfy the predominance requirement of Rule 23(b)(3), she said,since that amounts to a virtual redundancy. In fact, "No settlement class called to the Court's attention is as sprawling as the one certified here."
Turning to the adequate representation clause of Rule 23, in section (a)(4),Ginsburg again found the class wanting, as there were conflicts of interest,as noted above. "Representatives must be part of the class and possess the same interest and suffer the same injury as the class members," she said; otherwise, by definition, they are not representative. In the case of "the currently injured, the goal is generous immediate payments." But this is clearly notin the interest of those not currently injured, who may find in another decade or so that they are suffering serious--and expensive--injuries.
Given that the class referred to in the so-called class action suit was not aclass at all as defined in Rule 23, the Court saw no need to rule on the adequacy of the notice given within the suit itself, which was the original basis for the case being brought to the Court's attention. As to the need suggested earlier by the investigating committee, that Congress take action by appointing a "nationwide claims processing regime," the Court noted that this wasup to the legislative body, which had so far taken no action. But Rule 23 simply "cannot carry the large load the settling parties and the District Courtheaped upon it."
Breyer Urges Action
Justice Breyer, in an opinion with which Justice Stevens joined, concurred inpart and dissented in part. He agreed with the Court's basic stance that thesettlement offer itself was a relevant factor to use in considering whethera group constituted a class; however, as he said, he found "several problemswith the approach which lead me to a different conclusion."
In Breyer's view, the need for a settlement in the case made it extremely important for the Court to go ahead and allow such a settlement to take place. Furthermore, in looking at the settlement offer itself, he saw more commonality in the claimants than the rest of the Court did. As for the question of conflict of interest in representation, to Breyer it appeared that the Court wastrying to "second-guess" the court of appeals, without allowing that court to consider that particular question. Generally, Breyer viewed the settlementas fair, and therefore, "in the absence of further review by the Court of Appeals, I cannot accept the majority's suggestions that `notice' is inadequate."
Related Cases
- Huron Portland Cement Co. v. City of Detroit, 362 U.S. 440 (1960).
- Georgine v. Amchem Products, Inc. 83 F. 34d 610 (1996).
- Walker v. Liggett Group, Inc. 175 F.R.D. 226 (1997).
- In re Prudential Insurance Co. of America Sales Practices Litigation, 148 F.3d 283 (1998).
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