Master Supreme Court held that settlement-only class actions must independently satisfy Rule 23, emphasizing predominance and adequacy of representation. with this comprehensive case brief.
Amchem Products, Inc. v. Windsor is the Supreme Court’s leading decision on certification of settlement-only class actions under Federal Rule of Civil Procedure 23. Confronting a proposed nationwide asbestos settlement class that sought to globally resolve present and future claims, the Court made clear that the procedural safeguards embedded in Rule 23 do not relax simply because the parties desire settlement. Although the manageability concerns associated with trial may recede when no trial is contemplated, the Court insisted on a rigorous, undiluted application of Rule 23(a) and 23(b)(3), especially the requirements of adequacy of representation and predominance of common questions.
For mass torts and complex litigation, Amchem is a foundational case. It cautions that settlement cannot cure structural defects in class configuration, and that disparate interests within sprawling classes require real structural protections—often through subclasses and independent counsel—before absent class members can be bound. The decision reshaped how parties structure and courts evaluate global settlements, ensuring that efficiency does not eclipse the due process rights of absent and future claimants.
521 U.S. 591 (U.S. Supreme Court 1997)
A group of asbestos manufacturers and suppliers facing massive, nationwide liability sought to achieve global peace by negotiating a comprehensive settlement with a consortium of plaintiffs’ lawyers who held large inventories of asbestos claims. The parties agreed to seek certification of a nationwide settlement class under Rule 23(b)(3) encompassing several hundred thousand individuals with present asbestos-related injuries and millions more who had been exposed to asbestos but had not yet manifested disease. The settlement created a compensation schedule keyed to disease categories, established administrative procedures for processing claims, limited or eliminated punitive damages, and imposed strict eligibility and compensation criteria. It also constrained the future ability of class members—especially exposure-only plaintiffs who might later develop disease—to pursue individualized litigation. The district court certified the settlement class and approved the agreement. On appeal, the Third Circuit (in Georgine v. Amchem) reversed, holding that the settlement class failed to satisfy Rule 23’s requirements, particularly adequacy of representation and predominance under Rule 23(b)(3). The Supreme Court granted certiorari and affirmed the decertification.
Whether a federal court may certify a settlement-only class action under Rule 23(b)(3) when the proposed class fails to satisfy Rule 23(a)’s adequacy requirement and Rule 23(b)(3)’s predominance requirement, notwithstanding the fact that no trial will occur.
A class action—whether for litigation or settlement—must satisfy all the requirements of Rule 23. For a Rule 23(b)(3) class, the court must find that Rule 23(a)’s prerequisites are met (numerosity, commonality, typicality, and adequacy of representation) and that common questions predominate over individual ones and that a class action is superior to other methods. In the settlement-only context, the manageability factor under Rule 23(b)(3)(D) is not relevant because no trial will occur, but all other Rule 23 requirements apply with full force. Adequacy demands structural assurance of fair and adequate representation for divergent interests; a proposed settlement cannot supply the predominance of common issues, nor can Rule 23(e)’s fairness review substitute for compliance with Rule 23(a) and (b)(3).
The Supreme Court affirmed the Third Circuit’s decision decertifying the settlement-only class. The proposed class failed Rule 23(b)(3)’s predominance requirement and Rule 23(a)(4)’s adequacy of representation requirement; the inapplicability of trial manageability did not excuse noncompliance with the other Rule 23 criteria.
The Court emphasized that Rule 23’s protections exist to safeguard absent class members and cannot be diluted by the parties’ desire to settle. Although manageability at trial is not a concern for settlement classes, the core requirements of adequacy and predominance remain crucial and must be satisfied independently of the settlement’s terms. On adequacy of representation, the Court identified profound intra-class conflicts between currently injured plaintiffs (who typically prefer immediate, higher compensation and broad releases) and exposure-only claimants (who prioritize protection of future rights, medical monitoring, and the option to pursue individualized tort recoveries if disease later manifests). The same counsel purported to represent these divergent groups without structural safeguards such as subclasses and independent counsel. The settlement’s fixed grid, restrictions on punitive damages, and limitations on future claims meant that exposure-only members traded away significant rights for uncertain benefits, evidencing inadequate representation under Rule 23(a)(4). On predominance, the Court held that common issues did not predominate over individualized questions. Asbestos claims turn on highly individualized factors, including the timing, duration, intensity, and source of exposure; product identification; causation; comparative fault; statutes of limitations; defenses; and damages. Additionally, the proposed nationwide class implicated numerous variations in state substantive law, further defeating predominance. The existence of a negotiated settlement does not itself create predominance; it cannot erase the individual factual and legal issues embedded in mass tort claims. The Court also rejected the notion that the settlement’s fairness under Rule 23(e) could compensate for noncompliance with Rule 23(a) and (b)(3), reiterating that fairness review does not substitute for the procedural prerequisites to class certification. Finally, the Court clarified that while manageability is not a barrier in settlement-only classes, courts must apply an undiluted predominance and adequacy analysis precisely because there will be no trial to test the cohesion of the class or the protection of absent members’ interests.
Amchem is the canonical case establishing that settlement classes are not exempt from Rule 23’s structural safeguards. It requires courts to rigorously police adequacy and predominance even when a proposed settlement appears efficient or desirable. For mass torts, the decision pushed parties toward using subclasses, separate counsel for divergent interests, more tailored class definitions, and careful attention to choice-of-law. Amchem, together with Ortiz v. Fibreboard, reshaped the architecture of aggregate settlements, preventing global deals that sacrifice the rights of exposure-only or future claimants in the name of expediency.
A settlement-only class is certified solely to implement a negotiated settlement, with no intention of trying the case. Amchem did not prohibit settlement-only classes. It held that such classes must independently satisfy Rule 23(a) and 23(b)(3), except that trial manageability is not relevant. If adequacy and predominance are satisfied, a settlement-only class can be certified.
The Court found fundamental conflicts between currently injured plaintiffs and exposure-only claimants. Their interests diverged on compensation timing and amount, the treatment of punitive damages, and the ability to pursue future individualized tort remedies. Because the same counsel represented these divergent groups and the settlement did not provide structural protections such as subclasses with independent counsel, the representation was not adequate under Rule 23(a)(4).
Asbestos litigation involves individualized issues—exposure histories, causation, defenses, damages, and statutes of limitations—that vary dramatically across claimants. Additionally, the class spanned many states with materially different substantive laws. These individualized factual and legal issues overwhelmed any common questions regarding defendants’ conduct, defeating predominance under Rule 23(b)(3).
No. The Court held that the fairness inquiry under Rule 23(e) cannot substitute for compliance with Rule 23(a) and (b)(3). A settlement that appears substantively fair still cannot bind absent class members if the class was not properly certified in the first place.
Counsel should tailor the class to minimize intra-class conflicts; employ subclasses and independent counsel for groups with divergent interests; carefully analyze state-law variations; and build a record showing predominance and superiority independent of the settlement’s terms. Parties should not assume that the benefits of a global deal will relax Rule 23’s requirements.
Amchem set the modern baseline for evaluating settlement-only class actions: settlement cannot substitute for the rigorous protections of Rule 23. Courts must ensure that divergent interests are adequately represented and that common issues predominate, even when no trial is contemplated. The decision reframed the analysis away from expediency toward structural fairness for absent class members.
In the mass tort arena, Amchem’s insistence on undiluted Rule 23 compliance reshaped the design of nationwide settlements. It encourages narrower, more cohesive classes, the use of subclasses and independent counsel, and a careful predominance analysis that accounts for individual factual variations and state-law differences. As a result, Amchem remains essential reading for understanding both the promise and the limits of aggregate litigation.