## Facts

- Owners and lessees nationwide alleged rear liftgate latches in certain Chrysler minivans (model years 1984–1995) were defective and could fail in rear-impact collisions, and that Chrysler concealed the defect.
- During a federal safety investigation, Chrysler agreed to a recall-like service action to replace affected latches with improved latches at no cost; the investigation was closed after the agency deemed the action satisfactory.
- Multiple class actions were consolidated in federal court into a nationwide case; shortly after consolidation, the parties presented a proposed settlement providing free latch replacement while largely not resolving personal-injury or property-damage claims.
- The district court preliminarily approved the settlement, certified a nationwide settlement class under Rule 23(b)(3), and enjoined competing proceedings.
- Notice was mailed to approximately 4.3 million class members; 971 opted out.
- A class member attempted to opt out not only himself but all residents of a state and pursued a competing state-court class action; the district court enjoined him, limiting opt-out to his individual claim.
- After fairness hearings addressing objections that the settlement mirrored the prior service action, that notice was deficient, and that fees were excessive, the district court approved the settlement and awarded $5 million in attorneys’ fees.

## Issues

1. Whether the district court abused its discretion by certifying a nationwide settlement class under Rule 23(a) and Rule 23(b)(3).
2. Whether the settlement was “fair, reasonable, and adequate” given the relief provided, the claims released, and the existence of an earlier nationwide latch-replacement program.
3. Whether notice and opt-out procedures satisfied Rule 23(c)(2) and due process, including whether one class member could opt out a state-defined subgroup.
4. Whether the attorneys’ fee award reflected collusion or otherwise constituted an abuse of discretion.
5. Whether the district court properly enjoined competing state-court actions to protect the settlement and its jurisdiction.

## Decision

- The court affirmed certification of the nationwide settlement class, finding Rule 23(a) and 23(b)(3) satisfied in the settlement posture.
- The court affirmed approval of the settlement as fair, reasonable, and adequate under the governing settlement factors.
- The court held the notice program satisfied due process and Rule 23(c)(2), and that opt-out rights are individual; a class member could not opt out an entire state subgroup.
- The court affirmed the $5 million attorneys’ fee award, finding no abuse of discretion and no improper collusion.
- The court upheld the injunction against competing state proceedings as a permissible measure to protect the court’s jurisdiction and effectuate the settlement.

## Legal Principles

- Settlement-only class certification is permissible if Rule 23’s requirements are met; certification remains subject to abuse-of-discretion review.
- For Rule 23(b)(3) in settlement classes, predominance and superiority may be supported where common issues concerning a uniform course of conduct and a standardized remedy outweigh individualized questions, and the absence of trial reduces manageability concerns.
- Class settlements must be evaluated for fairness, reasonableness, and adequacy using a multi-factor inquiry that includes litigation risks, the value of relief, the stage of proceedings, counsel’s views, class reaction, and related governmental involvement.
- Rule 23(b)(3) opt-out rights belong to individual class members; one member cannot withdraw a group or state-defined subset from a certified class.
- A district court may enjoin competing actions when necessary to protect its jurisdiction and enforce its judgments within recognized statutory exceptions.

## Conclusion

The Ninth Circuit sustained a nationwide settlement resolving economic claims relating to an alleged vehicle defect, holding that the district court acted within its discretion in certifying a settlement class, approving the settlement and fee award, enforcing individual-only opt-out rights, and enjoining parallel litigation that threatened implementation of the settlement.


Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998)