Life After Amchem: The Class Struggle Continues, page 8

Life After Amchem (continued)

Page 8

Whether all mass tort litigation should be allowed -- or even encouraged -- to exhaust the litigants and the system until the endgame is reached, could be debated endlessly. Often, upon conclusion of a case, claimants have foregone any reasonable chance of compensation while defendants are punished with corporate extinction or insolvency. It is the duty of equity to prevent such outcomes. This duty was recognized in Coburn v. 4-R Corporation,³⁵ where the court stated that "[i]n no event . . . should . . . litigation become an unseemly race to the courtroom door with monetary prizes for a few winners and worthless judgments for the rest."³⁶

And thus we come to the central paradox of Amchem. While noting that the "opt-out" Rule 23(b)(3) procedure used in the settlement before it was a modern departure from the equitable procedures available under the earlier incarnations of the Rule, the Amchem Court also knew and articulated the practical differences between a trial class and a settlement class: while manageability for trial was not relevant, the requirement of adequate representation demanded stricter scrutiny in the settlement context.³⁷ Adequacy of representation is the touchstone of due process in equity's direct descendants—the "mandatory" classes certified in cases seeking primarily injunctive, declaratory, or other equitable relief, and in cases like Coburn, those involving "a limited fund."

Despite the presence of the Rule 23(b)(3) opt-out right as a safety valve for those dissatisfied with their representation by the plaintiffs and attorneys who were the settlement's proponents and the ability of dissatisfied class members to pursue their own destinies, adequacy became the stumbling block of the Amchem settlement. Had the Court approved that settlement, no opt-out right would exist, and arguably, no right to notice at all. Also, the Supreme Court's Amchem decision acknowledges that there would not be any predominance or superiority requirements to meet. There are hints in both the Supreme Court and Third Circuit decisions that an analogous decision brought under the "mandatory" provision of the Rule might survive.³⁸ However, it is unlikely that the settlement's resort to the "pure equity" provisions of Rule 23(b)(1) would have saved it, although the procedural legitimacy of the settlement would have been questioned less. Whether it was stillborn or simply nagged to death, the Amchem settlement was doomed because the appellate courts disdained the ethically controversial context in which the deal was made. Indeed, as noted above, the Third Circuit's rejection of the particulars of the settlement saved that court from outright reversal, despite the Supreme Court's rejection of the Third Circuit's central holding that a class proposed for settlement purposes must meet Rule 23 criteria as if it were intended to proceed to trial.

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NOTES

³⁵ 77 F.R.D. 43 (E.D. Ky. 1977).

³⁶ Id. at 45.

³⁷ See Amchem, 117 S. Ct. at 2248.

³⁸ Amchem's sister settlement, the Ahearn settlement, was indeed such a mandatory settlement. Whether this procedural distinction will save it, however, remains to be seen, as the action is again before the Fifth Circuit. See Flanagan v. Ahearn, 90 F.3d 963 (5th Cir.), reh'g denied, 101 F.3d 368 (5th Cir. 1996), vacated and remanded, 117 S. Ct. 2503 (1997).