## Facts

- A union administered a defined benefit pension plan that was amended in 1991 to add a cost-of-living adjustment (COLA) for active and retired participants.
- After the plan experienced financial strain, new trustees pursued judicial approval to eliminate the COLA for retirees without violating ERISA’s anti-cutback rule and then adopted a 1997 amendment eliminating the COLA for all participants.
- The trustees filed a federal action in the District of Maryland seeking a declaration that the 1997 COLA-elimination amendment was binding on all participants or, alternatively, that the 1991 COLA amendment was void.
- The district court conditionally certified a mandatory class under Federal Rule of Civil Procedure 23(b)(1), making class members bound by any approved resolution.
- Robert J. Devlin, a nonnamed class member, declined to serve as a subclass representative and instead filed a separate action in the Southern District of New York challenging the 1997 amendment; that court dismissed in favor of the Maryland proceeding.
- After the parties in the Maryland action reached a settlement, Devlin moved to intervene; the district court denied intervention as untimely but allowed Devlin to object at the Rule 23(e) fairness hearing.
- The district court approved the settlement over Devlin’s objections, binding him and other class members.

## Issues

1. Whether a nonnamed member of a Rule 23(b)(1) class who timely objected at the Rule 23(e) fairness hearing may appeal approval of a class settlement without first intervening.

## Decision

- The Supreme Court reversed the Fourth Circuit.
- A nonnamed class member who is bound by the settlement and timely objected at the fairness hearing may appeal the order approving the settlement without intervening.
- The Court treated the question as one of appellate “party” status rather than Article III standing.
- The Court emphasized that, in a mandatory class lacking an opt-out right, appeal may be the only realistic way for an objector to avoid being bound by an unacceptable disposition.

## Legal Principles

- An order approving a class settlement that binds nonnamed class members is a final decision as to their rights for purposes of appeal.
- Nonnamed class members are “parties” in the sense relevant to appeal when they are bound by the judgment and have used Rule 23(e)’s objection procedure.
- Formal intervention is not a prerequisite to appeal for a bound class member who timely objected to settlement approval.
- Concerns about excessive appeals do not justify denying appellate review to bound objectors; case-management tools can address administrative burdens.

## Conclusion

A nonnamed member of a mandatory Rule 23 class who timely objected at the fairness hearing may appeal approval of a settlement without first intervening, because the approval finally determines the objector’s bound rights and otherwise may leave no effective means to challenge the result.


Devlin v. Scardelletti, 536 U.S. 1 (2002)