521 U.S. 591 (1997)
In the early 1990s, the Judicial Panel on Multidistrict Litigation transferred all pending federal asbestos cases to the Eastern District of Pennsylvania for pretrial proceedings before Judge Weiner.1 Attorneys from the Plaintiffs' Steering Committee and the Center for Claims Resolution, a consortium of twenty former asbestos manufacturers, began settlement negotiations that initially addressed pending inventory claims but soon expanded to cover future claims.2
After CCR settled thousands of inventory plaintiffs' claims for more than $200 million through separate agreements, the parties on January 15, 1993, filed a single-day package.3 This package consisted of a complaint, answer, proposed settlement stipulation exceeding one hundred pages, and joint motion for conditional class certification in a new action not part of the MDL transfer.4
The complaint defined the class as all persons in the United States or its territories who had been exposed occupationally or through a spouse or household member to asbestos products attributable to CCR defendants and who had not filed suit as of January 15, 1993.5 This class encompassed both individuals with manifest diseases such as mesothelioma, lung cancer, and asbestosis and exposure-only individuals with no current symptoms. The group potentially numbered in the hundreds of thousands or millions.6
The accompanying stipulation created a no-fault administrative compensation matrix with fixed, non-inflation-adjusted award ranges for four disease categories. It imposed numerical caps on extraordinary claims and excluded compensation for medical monitoring, fear of future injury, and loss-of-consortium claims. A three-month opt-out period applied.7
The District Court conditionally certified the class under Rule 23(b)(3) for settlement purposes only, appointed class counsel, approved an extensive notice plan that reached millions of individuals, conducted fairness hearings, and entered orders finding the settlement fair while enjoining class members from pursuing separate asbestos suits.8 Objectors appealed, the Third Circuit vacated the certification, and the Supreme Court granted certiorari.9
Whether a proposed class action may be certified for settlement purposes only under Federal Rule of Civil Procedure 23 when the same requirements applicable to litigation classes are not met?10
Federal Rule of Civil Procedure 23 requires that a class action certified for settlement purposes only must satisfy all prerequisites of Rule 23(a) and (b)(3) that would apply if the case were litigated.11 The rule text and structure protect absent class members by demanding sufficient unity before they can be bound.12
No. The District Court certified the class for settlement purposes only after approving the fairness of the stipulation.13 Yet the Court of Appeals and Supreme Court required the same rigorous analysis that would apply to a litigation class.14 The single-day filing of the complaint, answer, and settlement stipulation in a new action outside the MDL transfer did not alter the obligation to meet every Rule 23 element independently of the settlement terms.15
The class certification cannot be upheld because the requirements of Rule 23 were not satisfied.16
Whether questions of law or fact common to the class predominate over questions affecting only individual members in a class of persons exposed to asbestos products under varying circumstances and subject to different state laws?17
Rule 23(b)(3) requires that questions of law or fact common to the class predominate over any questions affecting only individual members.18 This predominance inquiry focuses on the legal or factual questions that qualify each class member's case as a genuine controversy before any settlement is considered.19
No. Class members were exposed to different asbestos-containing products for different amounts of time in different ways and over different periods.20 Some suffered no physical injury while others suffered disabling or deadly diseases.21 Their claims arose under the laws of different states with varying rules on statutes of limitations, comparative fault, and punitive damages.22 These differences in exposure, disease latency, and governing state law overwhelmed any common issues such as the general health consequences of asbestos exposure.23
Common questions do not predominate, so certification under Rule 23(b)(3) is improper.24
Related opinions on this issue
Joined by Justice Stevens
Justice Breyer joined Parts I, II, III, and IV of the Court's opinion but disagreed with the conclusion that the settlement class fails to meet Rule 23's requirements.25 He would give more weight to settlement-related issues when determining whether common issues predominate.26 In his view, the settlement explains the importance of the class members' common features and common interests in receiving some compensation while avoiding large legal fees and delays.27
The District Court did not abuse its discretion in certifying the class for settlement purposes.28 He would reverse the judgment of the Court of Appeals and remand for further proceedings under the correct legal standard that treats settlement as a relevant factor.29
Whether named plaintiffs suffering from present asbestos-related injuries can fairly and adequately represent the interests of exposure-only class members who have not yet manifested any disease?30
Rule 23(a)(4) requires that the representative parties will fairly and adequately protect the interests of the class.31 This means the named plaintiffs must possess the same interest and suffer the same injury as the class members they seek to represent and that no conflicts of interest exist between named parties and the class.32
No. The named plaintiffs included individuals with manifest diseases such as mesothelioma and asbestosis who sought generous immediate payments.33 The class also included exposure-only individuals who rationally wanted protection against inflation, sturdy back-end opt-out rights, and causation provisions that could keep pace with changing science.34 These divergent interests in the allocation of a finite fund created conflicts that no single set of representatives could adequately protect for both groups.35
The named plaintiffs cannot adequately represent the entire class.36
Whether the fairness of a proposed settlement can substitute for or relax the certification requirements of Rule 23(a) and (b)(3)?37
The fairness of a proposed settlement under Rule 23(e) cannot substitute for or relax the certification requirements of Rule 23(a) and (b)(3).38 Those requirements protect absent class members by ensuring sufficient cohesion before they can be bound.39 A fairness inquiry alone would disarm both class counsel and the court by removing the adversarial check of litigation.40
No. The District Court found the settlement fair after extensive fairness hearings and an elaborate notice plan that reached millions of individuals.41 However, the Court of Appeals and Supreme Court held that the inquiry into whether a class action may be maintained is separate from the inquiry into the settlement's fairness.42 The settlement's terms, including fixed non-inflation-adjusted award ranges and exclusion of compensation for medical monitoring and loss-of-consortium claims, could not cure the absence of predominance and adequacy of representation.43
The fairness of the settlement does not justify certification when Rule 23's requirements are not met.44