Mass Torts in a World of Settlement

By Richard A. Nagareda | Go to book overview
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CHAPTER VII
MAXIMIZING
OR MINIMIZING
OPT-OUTS

Efforts at mandatory class treatment push hard at the legitimacy of the class action as a way to secure the peace. This chapter analyzes two significant moves in the opposite direction. The subject here consists of attempts to enhance the legitimacy of class settlements, either by dramatically expanding the opportunity of class members to opt out of the deal or by preserving that opportunity in nominal terms while, at the same time, deterring its exercise in practice.

In litigation over the diet drug combination fen-phen, a class settlement expanded opt-out rights. Specifically, the fen-phen deal created additional opportunities for class members to return to the tort system in the future— what have come to be known as “back-end” opt-out rights, beyond those required by Rule 23. Although they enhanced the legitimacy of the class settlement, these back-end opt-out rights endangered the security of the peace—and, not incidentally, the capacity of the settlement grid actually to deliver streamlined compensation for fen-phen users.

A separate development presses at the line between mandatory and optout classes. Here, the game is to craft a class settlement that ostensibly preserves class members' opportunity to opt out but that structures its terms so as to discourage class members from actually doing so. The aspiration, in short, is for the peace of a mandatory class settlement in practical effect through an opt-out class in outward appearance. An early version of a class settlement in litigation over hip implants manufactured by Sulzer Orthopedics, Inc. illustrates the problems associated with this strategy of opt-out deterrence.

This chapter uses the fen-phen and Sulzer hip implant examples to highlight the fundamental tension in mass tort class settlements between legiti

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