Complex Litigation: Settlement Class at Issue in Ortiz Appeal

Abstract

Commentary and analysis of the scheduled oral argument in Ortiz v. Fibreboard Corp., in the wake of the Supreme Court’s decision in Amchem Prods. Inc. v. Windsor (1997). The Ortiz appeal is the second global asbestos deal known as Ahearn, after a member of the class in which the Supreme Court will determine the extent and limits of settlement classes. The major difference between the Amchem and Ahearn settlements is that Amchem was consummated as a Rule 23(b)(3) opt-out class, while the Ahearn deal was structured as a Rule 23(b)(1)(B) mandatory class. And many of the same lawyers who litigated the Amchem case will return to the Supreme Court to argue Ortiz. The Court’s ultimate resolution of Ortiz is tremendously important for the resolution of mass tort litigation, as well as for settlement classes generally. When defendants and insurers seek the complete resolution of class -- frequently called “global peace” – the mandatory class is the preferred means to accomplish this goal. Mandatory classes, however, implicate due process rights that are otherwise protected only by Rule 23(b)(3) opt-out classes. This article explores the factual and procedural background leading up to the Fifth Circuit’s approval of the limited fund settlement of all asbestos claims, and the issues before the Supreme Court on appeal concerning whether and to what extent the principles the Court articulated in Amchem apply to Rule 23(b)(1)(B) mandatory classes.