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Amchem Prods. v. Windsor - 521 U.S. 591, 117 S. Ct. 2231 (1997)

Rule:

The Fed. R. Civ. P. 23(b)(3) predominance inquiry tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation. The appropriate inquiry under Fed. R. Civ. P. 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. But it is not the mission of Rule 23(e) to assure the class cohesion that legitimizes representative action in the first place.

Facts:

This case concerns the legitimacy under Rule 23 of the Federal Rules of Civil Procedure of a class-action certification, which 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. 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. 

Issue:

Under Rule 23 of the Federal Rules of Civil Procedure, may settlement play a role in the determination of the propriety of class certification?

Answer:

Yes.

Conclusion:

Where an action is presented to a Federal District Court as a settlement-only class action in which the parties seek certification as a class in order to obtain judicial approval of an already-negotiated settlement, the settlement is relevant to the determination whether the proposed class meets the requirements for certification set forth in Rule 23 of the Federal Rules of Civil Procedure. However, while the settlement was relevant to the determination whether certification of the class was proper under Rule 23, the class in the case at hand did not satisfy the requirements of Rule 23 as to (a) common-issue predominance, or (b) adequacy of representation.

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