Supreme Court Disallows Mass Tort Mandatory Settlement Class

On June 23, 1999, the Supreme Court, in a 7-2 decision, dealt a strong blow to the procedure of settling mass tort damage claims by means of a “mandatory” or “non opt-out” class action. In Ortiz v. Fibreboard Corporation, 119 S. Ct. 2295 (1999), the Court held that a mandatory settlement class of thousands of asbestos personal injury claimants was not properly certified under Rule 23(b)(1)(B) of the Federal Rules of Civil Procedure. The class had been certified on the basis of a theory that the resources available from the corporate defendant to settle the asbestos claims constituted a “limited fund” that would be shared by the asbestos claimants. The Supreme Court, although not eliminating entirely the possibility that a “limited fund” theory could be used to settle mass tort claims, raised serious questions about the procedure and held that it was not appropriately employed in the Ortiz case.

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