WHITE; DARRELL WHITTEN; TERRELLWILLIAMS; RAMONA WILLIAMS; SIDNEYWILSON; STACY WILSON,Plaintiffs-Appellees,andC. STUART MCPHERSON, Objector;ROBERT MENDOZA, Objector; GLORIAMENDOZA, Objector; MICHAEL RUBIN,Objector; RODERICK THORNTON,Objector; PETER VON SAVOYE,Objector,Appellants,v.CHRYSLER CORPORATION, a Delawarecorporation,Defendant-Appellee.STUART HANLON,Plaintiff-Appellee,andGEORGE VAN BUSKIRK, Objector; No. 96-16076DIANE CHEATHAM, Objector; ROBERTKEMPTON, D.C. No.Appellants, CV-95-02010-CALv.CHRYSLER CORPORATION, a Delawarecorporation,Defendant.Appeals from the United States District Courtfor the Northern District of CaliforniaCharles A. Legge, District Judge, PresidingArgued and SubmittedAugust 13, 1997--San Francisco, CaliforniaOpinion Filed June 9, 1998Amended July 24, 1998Before: Alfred T. Goodwin and Sidney R. Thomas,Circuit Judges, and John W. Sedwick,1 U.S. District Judge.Opinion by Judge ThomasSUMMARY
______________________COUNSEL Colette G. Matzzie, Washington, D.C., for the objectors-intervenors-appellants.James E. Carter, Madison, Georgia, for the objectors-appellants.Charles A. Newman, Bryan Cave, St. Louis, Missouri, for thedefendant-appellee.Elizabeth J. Cabraser, Michael F. Ram, Lieff, Cabraser, Hei-mann & Bernstein, San Francisco, California, for theplaintiffs-appellees.William M. Rubenstein, Assistant Attorney General of Con-necticut, Hartford, Connecticut, for Amicus Curiae States ofConnecticut, Arizona, Iowa, Kansas, New York, Nevada,Oklahoma, Pennsylvania, Rhode Island and Vermont.
_____________________________OPINION THOMAS, Circuit Judge:We are presented in this appeal with procedural and sub-stantive objections to the settlement of a nationwide classaction against Chrysler Corporation. After examining the set-tlement in accordance with the guidelines established inAmchem Products, Inc. v. Windsor, _______ U.S. _______ , 117 S. Ct.2231 (1997), we affirm the district court.I.In September 1993, the National Highway Traffic SafetyAdministration ("NHTSA") Office of Defect Investigationlearned of a rear liftgate latch problem in 1992 Chryslerminivans. NHTSA opened a preliminary investigation, whichwas expanded to an "engineering analysis" of all 1984-1994Chrysler minivans. The Engineering Analysis included a tech-nical evaluation of the rear latches, testing of the latches indifferent scenarios, and analyzing accidents, fatalities, injuriesand consumer complaints. Despite NHTSA's investigation,Chrysler publicly denied any problem with its rear liftgatelatches.The NHTSA investigation proceeded throughout 1994. OnNovember 17, 1994, Chrysler and NHTSA representativesmet to discuss the engineering analysis and the growing evi-dence that the latches presented a serious safety threat. Fol-lowing that meeting, NHTSA and Chrysler negotiated avoluntary resolution to the investigation wherein Chryslerannounced a "Service Action" to replace the rear liftgatelatches on all 1984-1994 minivans. The Service Action wasextended one month later to include 1995 minivans.The details of the Service Action are found in the corre-spondence exchanged between Chrysler and NHTSA; Chrys-ler understood its campaign to include: - a redesigned improved replacement latch to be installed free of charge; - a series of letters to minivan owners advising them the new latches were available; - an advertising campaign; - monitoring the response rate of owners and taking all necessary steps to ensure an appropriate response rate; and - quarterly reports to NHTSA.NHTSA kept its investigation open after Chrysler initiatedthe Service Action to ensure the company's compliance. Theinvestigation was finally closed on October 25, 1995. At thattime, NHTSA was satisfied that the voluntary action taken byChrysler had been as effective as a formal recall. However,NHTSA reserved the right to reopen the proceedings and ini-tiate a recall if Chrysler's Service Action proved inadequateor if Chrysler abandoned the plan.Prior to the agreement between NHTSA and Chrysler,plaintiffs lawyers in several states filed class actions in vari-ous state courts seeking latch replacement, as well as damagesunder various state-law warranties and theories of recovery.2The plaintiffs' counsel in the state actions met with engineer-ing experts, conducted and defended depositions, and wereproceeding through the normal course of document-intensivediscovery. Class counsel in the two California cases and theTexas case moved for class certification; however, the hear-ings were continued at Chrysler's request.Approximately two weeks before it announced theNHTSA-approved Service Action, Chrysler and counsel fromthe various state actions began serious settlement discussions,which continued throughout April, May and June 1995. As aresult of the settlement discussions, all of the state classactions were consolidated in one large national class action(the Hanlon class) in federal court in the Northern District ofCalifornia under Judge Legge on June 16, 1995. In their com-plaint the Hanlon plaintiffs asserted various claims againstChrysler with regard to an alleged defect in the rear liftgatelatches of the minivans. Three days after filing the case, theparties submitted a settlement agreement to the court forapproval. The district court held a preliminary hearing on thesettlement agreement on August 18, 1994, and issued anOrder granting preliminary approval of the settlement and cer-tifying the nationwide class of Minivan owners for settlementpurposes only. All personal injury and death cases areexcluded from this settlement.The Order also provided at Paragraph 19: Pending final determination of whether the settle- ment embodied in the Settlement Agreement is to be approved, no member of the Settlement Class, either directly, representatively, derivatively, or in any other capacity, shall commence or prosecute any action or proceeding in any court or tribunal assert- ing any of the claims described in paragraph 17 of the Settlement Agreement.Pursuant to the August 18 Order, the Court-approved noticeof the proposed settlement was mailed directly to over 3.3million Minivan owners. The order granting preliminaryapproval of the settlement set an objection and opt-out date ofOctober 20, 1995, and all activity on the state actions ceased.A few weeks after the Hanlon action was filed, RobertKempton, a resident of Georgia and Chrysler minivan owner,filed a similar class action in a Georgia state court. Kemptonsought to represent himself and all Georgia residents and enti-ties who purchased or leased a Chrysler minivan in the rele-vant product years. In direct contravention of the federaldistrict court's August 18 order, Kempton filed a motion tocertify the Georgia class on October 17, 1995. Kempton spe-cifically stated that his goal was either to opt out all Georgiaresidents from the Hanlon action or object on their behalf.The Hanlon plaintiffs and Chrysler filed a motion to enjoinKempton from proceeding, and the California district courtissued such an order on October 19, 1995.Kempton expressly ignored the injunction and proceededwith the Georgia class certification, arguing that he had optedout of the Hanlon class and therefore was not subject to thatcourt's jurisdiction or bound by its orders. The Georgia statejudge entered an order conditionally granting Kempton'smotion and certifying the class.Following notification of the proposed settlement, the dis-trict court in California conducted two fairness hearings onthe adequacy of the settlement in November 1995. The courtmade several findings at the second hearing on November 30,1995, indicating its approval of the settlement. Prior to enter-ing the order, the court gave objectors an opportunity to pre-sent arguments on the pending settlement. The objections cen-tered around one primary issue: the adequacy and fairness ofthe settlement in light of Chrysler's prior agreement withNHTSA to replace all of the defective latches. At the conclu-sion of the hearing, the court entered a final order of settle-ment and award of attorneys fees.In early 1996, Chrysler acknowledged that approximatelyone million class members never received the notice of settle-ment and opportunity to opt-out of the settlement classbecause it had inadvertently failed to include them in the ini-tial mailing. As a result, Chrysler moved to set aside the finalorder of settlement and reopen the proceedings to allow addi-tional notice to these class members. The court agreed andgranted Chrysler's Rule 60(b) Motion to Partially Reopen theJudgment on February 23, 1996.A third and final fairness hearing was held on April 29,1996. At the close of that hearing, the court issued a neworder that was substantially similar to the November 30 order.The objectors timely appealed to this court.II.In recent years, the difficulties attendant to consummatingsettlement of mass tort and consumer lawsuits have caused lit-igants to instigate lawsuits for the limited purpose of obtain-ing court approval of a certified class settlement. Althoughthere is nothing inherently wrong with this practice, we mustpay "undiluted, even heightened, attention" to class certifica-tion requirements in a settlement context. Amchem ProductsInc. v. Windsor, _______ U.S. _______, 117 S. Ct. 2231, 2248 (1997)("Amchem").A.[1] Our threshold task is to ascertain whether the proposedsettlement class satisfies the requirements of Rule 23(a) of theFederal Rules of Civil Procedure applicable to all classactions, namely: (1) numerosity, (2) commonality, (3) typical-ity, and (4) adequacy of representation. Id. at 2245. The pre-requisite of numerosity is discharged if "the class is so largethat joinder of all members is impracticable." Fed. R. Civ. P.23(a)(1). None of the objectors contest certification for failureto meet this condition, and as a nationwide class with millionsof class members residing in fifty states, this requirement isclearly satisfied.[2] A class has sufficient commonality "if there are ques-tions of fact and law which are common to the class. " Fed. R.Civ. P. 23(a)(2). The commonality preconditions of Rule23(a)(2) are less rigorous than the companion requirements ofRule 23(b)(3). Indeed, Rule 23(a)(2) has been construed per-missively. All questions of fact and law need not be commonto satisfy the rule. The existence of shared legal issues withdivergent factual predicates is sufficient, as is a common coreof salient facts coupled with disparate legal remedies withinthe class. Although members of the proposed class in thisinstance may possess different avenues of redress, theirclaims stem from the same source: the allegedly defectivedesigned rear liftgate latch installed in minivans manufacturedby Chrysler between 1984 and 1995. Thus, the proposed classshares sufficient factual commonality to satisfy the minimalrequirements of Rule 23(a)(2).[3] The typicality prerequisite of Rule 23(a) is fulfilled if"the claims or defenses of the representative parties are typi-cal of the claims or defenses of the class." Fed. R. Civ. P.23(a)(3). Under the rule's permissive standards, representativeclaims are "typical" if they are reasonably co-extensive withthose of absent class members; they need not be substantiallyidentical. In this instance, the broad composition of the repre-sentative parties vitiates any challenge founded on atypicality.The representative parties comprise persons from every state,representing all models of Chrysler minivans and includeminivan owners whose latches remain operable. The narrowfocus of the proposed class was to obtain a defect-free rearliftgate latch in Chrysler minivans owned by class members,or receive adequate non-personal injury compensatory dam-ages. Given these limited objectives and the broad composi-tion of the representative parties, the representative claimswere sufficiently typical to pass muster under Rule 23(a)(3).[4] The final hurdle interposed by Rule 23(a) is that "therepresentative parties will fairly and adequately protect theinterests of the class." Fed. R. Civ. P. 23(a)(4). To satisfy con-stitutional due process concerns, absent class members mustbe afforded adequate representation before entry of a judg-ment which binds them. See Hansberry v. Lee,
311 U.S. 32
,42-43 (1940). Resolution of two questions determines legaladequacy: (1) do the named plaintiffs and their counsel haveany conflicts of interest with other class members and (2) willthe named plaintiffs and their counsel prosecute the actionvigorously on behalf of the class? See Lerwill v. InflightMotion Pictures, Inc., 582 F.2d 507, 512 (9th Cir. 1978).Examination of potential conflicts of interest has long beenan important prerequisite to class certification. That inquiry isespecially critical when the a class settlement is tenderedalong with a motion for class certification. Amchem instructsus to give heightened scrutiny to cases in which class mem-bers may have claims of different strength.Amchem was a settlement class action which attempted tosettle all pending and future asbestos litigation. The asbestosmanufacturers wished to resolve all claims, including thosenot yet filed or even in existence at the time of the settlement.The class was never divided into sub-classes and additionalcounsel was never appointed to represent the interests ofplaintiffs with as yet undeveloped or undiagnosed injuries.Despite these problems, the class was conditionally certifiedand the settlement approved.The Third Circuit vacated the certification because therequirements of Rule 23 were not met independent of the set-tlement agreement. Georgine v. Amchem Products, Inc., 83F.3d 610, 617-618 (3d Cir. 1996). The Supreme Courtaffirmed. Amchem Products, Inc. v. Windsor, _______ U.S. _______ ,117 S. Ct. 2231 (1997). The Court found that the clashinginterests of present and future claimants presented insur-mountable conflicts for class counsel who could not possiblyprovide adequate representation to both groups as required byRule 23(a)(4). Id. at 2251. The Court also held that all of theRule 23 standards for class actions must be met withoutregard to the presence or terms of a pending settlement agree-ment. Id. at 2249.At the heart of Amchem was concern over settlement allo-cation decisions; asbestos manufacturers had a designatedamount of money that was not fairly distributed between pres-ent and future claimants. The Amchem settlement eliminatedall present and future claims against asbestos manufacturers,with class counsel attempting to represent both groups ofplaintiffs. The Supreme Court found this dual representationto be particularly troubling, given that present plaintiffs hada clear interest in a settlement that maximized current funds,while future plaintiffs had a strong interest in preservingfunds for their future needs and protecting the total fundagainst inflation.[5] Unlike the class in Amchem, this class of minivan own-ers does not present an allocation dilemma. Potential plaintiffsare not divided into conflicting discrete categories, such asthose with present health problems and those who maydevelop symptoms in the future. Rather, each potential plain-tiff has the same problem: an allegedly defective rear latch-gate which requires repair or commensurate compensation.The differences in severity of personal injury present inAmchem are avoided here by excluding personal injury andwrongful death claims. Similarly, there is no structural con-flict of interest based on variations in state law, for the namedrepresentatives include individuals from each state, and thedifferences in state remedies are not sufficiently substantial soas to warrant the creation of subclasses. Representatives ofother potential subclasses are included among the named rep-resentatives, including owners of every minivan model. How-ever, even if the named representatives did not include abroad cross-section of claimants, the prospects for irreparableconflict of interest are minimal in this case because of the rel-atively small differences in damages and potential remedies.[6] To further forfend problems caused by potential sub-class differences, the actions and tendered settlement werenarrowly circumscribed. No personal injury or wrongful deathclaims were included, and any class member who wished todo so could opt out of the settlement class. To fulfill this lim-ited purpose, the proposed settlement does not propose differ-ent terms for different class members; on the contrary,treatment of each class member is identical. Given these care-ful precautions and safeguards, no improper conflict of inter-est existed which would deny absent class members adequaterepresentation.Our second adequacy inquiry is directed to the vigor withwhich the named representatives and their counsel will pursuethe common claims. Although there are no fixed standards bywhich "vigor" can be assayed, considerations include compe-tency of counsel and, in the context of a settlement-only class,an assessment of the rationale for not pursuing further litiga-tion.[7] The objectors do not seriously challenge the compe-tence of class counsel, and the record dispels any cause forconcern. Affidavits submitted to the district court show expe-rience prosecuting dozens of high profile class action casesand products liability litigation. If these attorneys are notequal to the task of prosecuting this case, it is not clear to uswho would be. The objectors presented no evidence, and wecould find none in the record, to indicate any deficiencies orconflicts of interest on the part of class counsel.The Amchem Court also noted the problem of counsel "notprepared to try a case." Such counsel is, almost by definition,inadequate because an inability or unwillingness to try a casemeans the class loses all of the benefits of adversarial litiga-tion. "Class counsel confined to settlement negotiations couldnot use the threat of litigation to press for a better offer."Amchem, 117 S.Ct. at 2248-2249. District courts must beskeptical of some settlement agreements put before thembecause they are presented with a "bargain proffered for . . .approval without benefit of an adversarial investigation." Id.at 2249.These concerns warrant special attention when the recordsuggests that settlement is driven by fees; that is, when coun-sel receive a disproportionate distribution of the settlement, orwhen the class receives no monetary distribution but classcounsel are amply rewarded. See, e.g., In re General MotorsCorp. Pick-Up Truck Fuel Tank Prods. Liab. Litig. , 55 F.3d768 (3d Cir.), cert. denied,
516 U.S. 824
(1995).[8] These circumstances are not present in this case. Classcounsel prosecuted several state class actions in strategicstates prior to the filing of the federal consolidated action.They conducted the initial factual investigation, even prior tolearning of the NHTSA investigation. They consulted andretained automotive and engineering experts to assess thedesign specifications, blueprints, and other Chrysler docu-mentation relating to the minivans. They assessed the failuremode commonly experienced and corroborated that thereported failures were due to defective latch design. Theyreviewed Chrysler's history of advertising the minivan as a"safe family vehicle" in order to assess any implied or expresswarranties and possible misrepresentation claims. Theyengaged in the traditional discovery of products liability liti-gation, including document request and production, interroga-tories, and the taking and defending of depositions. Theyfought Chrysler's requests for protective orders, successfullyresisted Chrysler's attempts to remove the various actions tofederal court, and its attempt to transfer all of the cases to anMDL proceeding. Plaintiffs' counsel spoke and conferred reg-ularly to coordinate their litigation strategy and to apply asmuch pressure as possible to Chrysler. We find counsel'sprosecution of the case sufficiently vigorous to satisfy anyRule 23(a)(4) concerns.[9] In sum, the named representatives have fulfilled thethreshold requirements of Fed. R. Civ. P. 23(a) by satisfyingthe preconditions of numerosity, commonality, typicality, andadequacy of representation. The named plaintiffs have alsosatisfied the heightened scrutiny we must give to Rule 23(a)requirements when considering certification of a settlement-only class.B.[10] In addition to meeting the conditions imposed by Rule23(a), the parties seeking class certification must also showthat the action is maintainable under Fed. R. Civ. P. 23(b)(1),(2) or (3). Amchem, 117 S. Ct. at 2245. In the instant case, theparties propose certification pursuant to Rule 23(b)(3), whichis appropriate "whenever the actual interests of the parties canbe served best by settling their differences in a single action."7A Wright & Miller, Federal Practice & Procedure S 1777(2d ed. 1986). To qualify for certification under this subsec-tion, a class must satisfy two conditions in addition to theRule 23(a) prerequisites: common questions must"predominate over any questions affecting only individualmembers," and class resolution must be "superior to otheravailable methods for the fair and efficient adjudication of thecontroversy." Fed. R. Civ. P. 23(b)(3).[11] "The Rule 23(b)(3) predominance inquiry testswhether proposed classes are sufficiently cohesive to warrantadjudication by representation." Amchem, 117 S. Ct. at 2249.This analysis presumes that the existence of common issuesof fact or law have been established pursuant to Rule 23(a)(2);thus, the presence of commonality alone is not sufficient tofulfill Rule 23(b)(3). In contrast to Rule 23(a)(2), Rule23(b)(3) focuses on the relationship between the common andindividual issues. "When common questions present a signifi-cant aspect of the case and they can be resolved for all mem-bers of the class in a single adjudication, there is clearjustification for handling the dispute on a representative ratherthan on an individual basis." Wright & Miller, supra, S 1778.Settlement benefits cannot form part of a Rule 23(b)(3) analy-sis; rather the examination must rest on "legal or factual ques-tions that qualify each class member's case as a genuinecontroversy, questions that preexist any settlement. " Amchem,117 S. Ct. at 2249.[12] A common nucleus of facts and potential legal reme-dies dominates this litigation. Variations in state law do notnecessarily preclude a 23(b)(3) action, but class counselshould be prepared to demonstrate the commonality of sub-stantive law applicable to all class members. Phillips Petro-leum Co. v. Shutts,
472 U.S. 797, 821
-23 (1985). In this case,although some class members may possess slightly differingremedies based on state statute or common law, the actionsasserted by the class representatives are not sufficiently anom-alous to deny class certification. On the contrary, to the extentdistinct remedies exist, they are local variants of a generallyhomogenous collection of causes which include products lia-bility, breaches of express and implied warranties, and "lemonlaws." Individual claims based on personal injury or wrongfuldeath were excluded from the class. Thus, the idiosyncraticdifferences between state consumer protection laws are notsufficiently substantive to predominate over the sharedclaims. Indeed, at the November 30, 1995 fairness hearing,the objectors acknowledged that independent of any varia-tions in state law, there were still sufficient common issues towarrant a class action, particularly questions of Chrysler'sprior knowledge of the latch deficiency, the design defect, anda damages remedy.[13] Rule 23(b)(3) also requires that class resolution mustbe "superior to other available methods for the fair and effi-cient adjudication of the controversy." The superiority inquiryunder Rule 23(b)(3) requires determination of whether theobjectives of the particular class action procedure will beachieved in the particular case. Wright & Miller, supraS 1779. This determination necessarily involves a compara-tive evaluation of alternative mechanisms of dispute resolu-tion. In this instance, the alternative methods of resolution areindividual claims for a small amount of consequential dam-ages or latch replacement. Further, the statute of limitationshas run for owners of older vehicles under many state laws,and state lemon laws almost universally require that the vehi-cle be defective beyond repair -- a condition which is impos-sible for many owners to demonstrate. Thus, many claimscould not be successfully asserted individually. Even if effica-cious, these claims would not only unnecessarily burden thejudiciary, but would prove uneconomic for potential plain-tiffs. In most cases, litigation costs would dwarf potentialrecovery. In this sense, the proposed class action is paradig-matic. A fair examination of alternatives can only result in theapodictic conclusion that a class action is the clearly preferredprocedure in this case.[14] Assessment of the non-exclusive factors listed in Rule23(b)(3) which potentially apply to both the predominanceand superiority inquiries yields the same result. From eithera judicial or litigant viewpoint, there is no advantage in indi-vidual members controlling the prosecution of separateactions. There would be less litigation or settlement leverage,significantly reduced resources and no greater prospect forrecovery. With a few exceptions, the pre-existing lawsuitswere cooperatively managed and can be effectively mergedinto the instant action. No particular forum stands out as alogical venue for concentration of claims. Thus, considerationof the factors enumerated in Rule 23(b)(3) does not alter theconclusion.[15] Thus, given the limited focus of the action, the sharedfactual predicate and the reasonably inconsequential differ-ences in state law remedies, the proposed class was suffi-ciently cohesive to survive Rule 23(b)(3) scrutiny. Acomparative examination of alternatives underscores the wis-dom of a class action in this instance. Consideration of thespecific, non-exclusive factors identified in Rule 23(b)(3) pro-duces the same result. Thus, the requisite predominance andsuperiority tests are satisfied, and the conditions of Rule23(b)(3) have been met.C.[16] The objectors claim error in the brevity of the districtcourt findings, and the district court was, to say the least,restrained and succinct in explaining its reasoning. However,as the Supreme Court has stated, "[s]ometimes the issues areplain enough from the pleadings to determine whether theinterests of the absent parties are fairly encompassed withinthe named plaintiff's claim . . . ." General Telephone Co. ofthe Southwest v. Falcon,
457 U.S. 147, 160
(1982). This isjust such a case. The record is fully developed, the issues areplain and the analytical framework clear. All the parties,including the objectors, have been represented on appeal byskilled advocates who have exhaustively briefed and arguedthe salient questions. Although the district court's findings arealmost conclusory, the record provides more than adequatefoundation upon which to reach our conclusions. There is novalue to be served in remanding this case for the entry of fur-ther self-evident findings. The parties seeking certificationhave quite clearly satisfied the requirements of Rule 23(a) andRule 23(b)(3), and the district court did not abuse its discre-tion in certifying the class. Hilao v. Estate of Marcos, 103F.3d 767, 774 (9th Cir. 1996). Amchem cautioned against con-flating the class certification requirements of Fed. R. Civ. P.23(a) and (b) into the "fair, adequate and reasonable" precon-ditions for class settlement pursuant to Fed. R. Civ. P. 23(e),and mandated heightened scrutiny of proposed settlement-only class certifications. We have independently analyzed theproposed class with these admonitions in mind, and find nofault with district court's class certification even under theserigorous standards.III.After the federal consolidated class action was filed, butbefore the settlement agreement was presented to the districtcourt for preliminary approval, Robert Kempton filed a stateclass action in Georgia. Kempton's theory of recovery wasvery similar to that of the federal action, but he claimed reliefunder Georgia state law. He sought to represent himself andall other Georgia consumers who owned or leased a minivanfrom the relevant model years, and asserted the right to opt-out all Georgia customers from the federal class action.The district court expressly held that Kempton's actions inproceeding with his state class action, in direct contraventionof the district court's injunction against such a proceeding,operated to exclude him from the nationwide class, but hisopt-out had no effect on the remaining Georgia class mem-bers. Kempton argues on appeal that the district court erred,that his actions were taken on behalf of all Georgia classmembers, and that the state court's certification of the Geor-gia action operates to opt-out all Georgia class members fromthe plaintiff class.[17] The district court was entirely correct. All class mem-bers in a Rule 23(b)(3) action are entitled to due process,including notice. Phillips Petroleum v. Shutts ,
472 U.S. 797
,810-813 (1985). The procedural due process rights of thesemembers include an opportunity to be excluded from theaction. The right to participate, or to opt-out, is an individualone and should not be made by the class representative or theclass counsel. See Newberg and Conte, Newberg on ClassActions, S 16.16 at 90 (3d ed. 1992) ("The decision to exer-cise the right of exclusion in a Rule 23(b)(3) action is an indi-vidual decision of each class member and may not be usurpedby the class representative or class counsel.") There is noclass action rule, statute, or case that allows a putative classplaintiff or counsel to exercise class rights en masse, either bymaking a class-wide objection or by attempting to effect agroup-wide exclusion from an existing class. Indeed, to do sowould infringe on the due process rights of the individualclass members, who have the right to intelligently and indi-vidually choose whether to continue in a suit as class mem-bers. Eisen v. Carlisle & Jacquelin,
417 U.S. 156
, 173-77(1974). Additionally, to allow representatives in variouslyasserted class actions to opt a class out without the permissionof individual class members "would lead to chaos in the man-agement of class actions." Berry Petroleum Co. v. Adams &Peck, 518 F.2d 402, 412 (2d Cir. 1975). In this case, all mem-bers of the purported Georgia class were notified of this classaction and the proposed settlement, and all but twenty-eightelected to remain in the class. By contrast, there is no evi-dence in the record that any Georgia class member receivednotice of the Kempton suit and made an intelligent election tojoin or decline to participate in it.Kempton relies on In re Joint Eastern & Southern Dist.Asbestos Litig., 14 F.3d 151 (2d Cir. 1994), to support hisnotion of a state-wide opt-out on behalf of all Georgia classmembers, regardless of their individual preferences or actions.His reliance on this case is misplaced, however, as it providesno support for his contention that his power as a named stateclass representative allows him to act on behalf of all otherstate class members in a nationwide suit and exercise theiropt-out rights for them. Rather, in that case the three groupsof victims all possessed liquidated judgments or settlementswhich were in existence and final prior to the filing of theclass action. The Second Circuit held that it was in the discre-tion of the trial court to deem subclasses which had obtainedprior settlements or judgments to have opted out of the newclass because their rights had been determined previously. Id.at 156. That theory is inapplicable to cases such as this inwhich the separate action is filed subsequently and the rightsof the putative subclass have not been determined.[18] In addition, the temporary approval of the nationwidesettlement stayed the state class actions. The federal court hadthe power to issue an injunction against continued state pro-ceedings under the All Writs Act, 28 U.S.C. S 1651 ("[t]heAll Writs Act . . . empowers the federal courts to enjoin stateproceedings that interfere, derogate, or conflict with federaljudgments, orders, or settlements." Keith v. Volpe, 118 F.3d1386, 1390 (9th Cir. 1997)) and the Anti-Injunction Act, 28U.S.C. S 2283 (a federal court may intervene and enjoin statecourt proceedings in three narrow circumstances, one ofwhich includes when it is necessary to protect the court'sjurisdiction). Although comity requires federal courts to exer-cise extreme caution in interfering with state litigation, federalcourts have the power to do so when their jurisdiction isthreatened.[19] Further, Fed. R. Civ. P. Rule 23(d) vests a districtcourt with the authority and discretion to protect the interestsand rights of class members and to ensure its control over theintegrity of the settlement approval process. "[A] district courthas both the duty and the broad authority to exercise controlover a class action and to enter appropriate orders governingthe conduct of counsel and parties." Gulf Oil Co. v. Bernard,
452 U.S. 89, 100
(1981).[20] Because a class representative in a state class action,acting at the same time as a federal class action, lacks thepower to opt-out an entire class without the permission ofindividual class members, the district court properly ruled thatKempton's actions served as an individual opt-out for Kemp-ton alone.IV.Having concluded independent of settlement considerationsthat the proposed class passes certification muster, our analy-sis must turn to the proposed settlement itself. In that determi-nation, we are guided by Rule 23(e) which provides: A class action shall not be dismissed or compro- mised without the approval of the court, and notice of the proposed dismissal or compromise shall be given to all members of the class in a manner as the court directs.A.[21] Adequate notice is critical to court approval of a classsettlement under Rule 23(e). In this case, the notice providedto the absent class members provided each member with theopportunity to opt-out and individually pursue any state lawremedies that might provide a better opportunity for recovery.The objectors contended at oral argument that even if thenotice provided to the class met the requirements of Rule23(c) -- which it clearly did -- the absent class members stilldid not understand what they were giving up. There is no evi-dence of such wide-scale confusion or ignorance in therecord.On the contrary, the text of the notice plainly stated: If the proposed settlement is approved, it will be binding and will release Chrysler from any and all claims, including any claims for consumer damages or equitable relief, arising out of or related to the Minivan rear liftgate latches, that were or could have been asserted by Settlement Class members in the Hanlon lawsuit. In addition, if the proposed settle- ment is approved, it will release any and all claims, arising out of or related to the Minivan rear liftgate latches, that were or could have been asserted for Settlement Class members in certain class action lawsuits pending in various state courts around the United States. The proposed settlement does not, however, release, dismiss, or affect any claims for personal injury or wrongful death as an alleged result of the rear-door latch on the Minivans.The notice resulted in approximately 971 members of theclass exercising their opt-out right. This number reveals twothings: (1) at least some portion of the class understood thenotice and chose not to participate in the settlement for what-ever reason; and (2) the vast majority of the class -- over99.9% -- agreed to be bound. This is how Rule 23 works, andwe decline any opportunity to rewrite it by implication.The individual notice sent to each minivan owner, coupledwith the pre-trial publicity, NHTSA actions, and nationwidedealer participation was sufficient to bring the urgency of theaction to each class member's attention. There is no evidencethat the settlement proposed and accepted by the district courtdid anything to advance the rights of one group of claimantsover another and plaintiffs who were at risk of losing whatthey deemed valuable claims had an opportunity to protecttheir interests.B.[22] Fed. R. Civ. P. 23(e) requires the district court todetermine whether a proposed settlement is fundamentallyfair, adequate, and reasonable. Class Plaintiffs v. City ofSeattle, 955 F.2d 1268, 1276 (9th Cir. 1992). Our review ofthe district court's decision to approve a class action settle-ment is extremely limited. Id. It is the settlement taken as awhole, rather than the individual component parts, that mustbe examined for overall fairness. Officers for Justice v. CivilServ. Comm'n of San Francisco, 688 F.2d 615, 628 (9th Cir.1982). Neither the district court nor this court have the abilityto "delete, modify or substitute certain provisions." Id. at 630.The settlement must stand or fall in its entirety. Id.Assessing a settlement proposal requires the district courtto balance a number of factors: the strength of the plaintiffs'case; the risk, expense, complexity, and likely duration of fur-ther litigation; the risk of maintaining class action statusthroughout the trial; the amount offered in settlement; theextent of discovery completed and the stage of the proceed-ings; the experience and views of counsel; the presence of agovernmental participant; and the reaction of the class mem-bers to the proposed settlement. Torrisi v. Tucson Elec. PowerCo., 8 F.3d 1370, 1375 (9th Cir. 1993), quoting Officers forJustice, 688 F.2d 615, 625 (9th Cir. 1982). To survive appel-late review, the district court must show it has explored com-prehensively all factors. See Protective Comm. for Indep.Stockholders of TMT Trailer Ferry, Inc. v. Anderson , 390U.S. 414, 434 (1968).[23] Several circuits have held that settlement approval thattakes place prior to formal class certification requires a higherstandard of fairness. The dangers of collusion between classcounsel and the defendant, as well as the need for additionalprotections when the settlement is not negotiated by a court-designated class representative, weigh in favor of a moreprobing inquiry than may normally be required under Rule23(e). This is the position adopted by the Third Circuit in GMPick-Up Litig., 55 F.3d at 805 ("We affirm the need for courtsto be even more scrupulous than usual in approving settle-ments where no class has yet been formally certified."); theSecond Circuit in Weinberger v. Kendrick, 698 F.2d 61, 73(2d Cir. 1982) ("district judges who decide to employ such aprocedure are bound to scrutinize the fairness of the settle-ment agreement with even more than the usual care"); and theSeventh Circuit in Mars Steel Corp. v. Continental IllinoisNat'l Bank & Trust, 834 F.2d 677, 681 (7th Cir. 1987)("Simer and Weinberger emphasize . . . that when class certi-fication is deferred, a more careful scrutiny of the fairness ofthe settlement is required. We agree . . . ."). See also Manualfor Complex Litigation S 30.45 (3rd. ed. 1995) ("Approvalunder Rule 23(e) of settlements involving settlement classes. . . requires closer judicial scrutiny than approval of settle-ments where class certification has been litigated.") No circuithas held to the contrary. Because settlement class actionspresent unique due process concerns for absent class mem-bers, we agree with our sister circuits and adopt this standardas our own.We have repeatedly stated that the decision to approve orreject a settlement is committed to the sound discretion of thetrial judge because he is "exposed to the litigants, and theirstrategies, positions and proof." Officers for Justice, 688 F.2dat 626 (internal quotation omitted). The district court held ahearing in August 1995 in which it granted preliminaryapproval of the settlement agreement and approved a class-wide notice. Two fairness hearings followed in November1995, and a third was held in April 1996. The transcripts ofthe hearings reveal an exhaustive presentation by the objec-tors raising virtually all of the issues noted in the briefs andin oral argument before this court.In approving the settlement under Rule 23(e), the districtcourt noted that the class was not giving up any right to chal-lenge the adequacy of the replacement latch and was relievedfrom any duty to prove that the original latch was defective.The monitoring by class counsel and the additional outreachprovided by Chrysler also worked in favor of the class interms of extended notification and the fulfillment of all terms.The district court also retains jurisdiction over the implemen-tation of the settlement. Class counsel may return to court ifChrysler is not using its "best efforts" to obtain the latchreplacement goals or if the outreach and notification funds areallocated or spent in an inappropriate manner. The court alsorecognized that the alternatives to settlement were not promis-ing; the parties could return to the bargaining table but thatwas no guarantee that the class would receive a better deal.Allowing the state court actions to proceed put the entire classat risk of "balkanized decisions" and high expenses -- theonly benefit being that "a few people would get a little moremoney."[24] The judge's decision to approve the settlement wascorrect on the merits, and reflected the proper deference to theprivate consensual decision of the parties. As we noted inOfficers for Justice, "the court's intrusion upon what is other-wise a private consensual agreement negotiated between theparties to a lawsuit must be limited to the extent necessary toreach a reasoned judgment that the agreement is not the prod-uct of fraud or overreaching by, or collusion between, thenegotiating parties, and that the settlement, taken as a whole,is fair, reasonable and adequate to all concerned. " Id. at 625.The fairness hearings support such a finding.There is no evidence to suggest that the settlement wasnegotiated in haste or in the absence of information illuminat-ing the value of plaintiffs' claims. In fact, settlement negotia-tions began several months prior to the filing of theconsolidated federal action and included numerous meetings.No evidence of collusion was presented to the district court orotherwise evident in the record.The settlement presented to the district court obligatesChrysler to make the minivans safe. This fact alone sets thiscase apart from GM Pick-Up Litig. and In re Ford Motor Co.Bronco II Prods. Liab. Litig., 981 F. Supp. 969 (E.D. La.1997) -- cases in which a settlement agreement was rejectedin large measure because it did nothing to remedy the safetyproblem with the vehicles. Again and again, the objectors reit-erated that their primary concern was the safety of the vehi-cles and the prevention of injury. Of course it is possible, asmany of the objectors' affidavits imply, that the settlementcould have been better. But this possibility does not mean thesettlement presented was not fair, reasonable or adequate. Set-tlement is the offspring of compromise; the question weaddress is not whether the final product could be prettier,smarter or snazzier, but whether it is fair, adequate and freefrom collusion. In this regard, the fact that the overwhelmingmajority of the class willingly approved the offer and stayedin the class presents at least some objective positive commen-tary as to its fairness. There was no disparate treatmentbetween class members; all stood to benefit equally, a factwhich lessens the likelihood that the named plaintiffs andtheir attorneys colluded with Chrysler to increase their ownrecovery at the expense of the unnamed plaintiffs who classcounsel had a duty to represent. No objector stepped forwardand suggested that his or her personal claim was being sacri-ficed for the greater good -- and if any thought that was thecase, they had the right to opt-out of the class.The district court's final determination to approve the set-tlement should be reversed "only upon a strong showing thatthe district court's decision was a clear abuse of discretion."In re Pacific Enterprises Sec. Litig., 47 F.3d 373, 377 (9thCir. 1995) (internal quotation omitted). There was no suchshowing here.C.Several state Attorneys General,3 acting as amicus curiae,contest one paragraph of the settlement agreement.Paragraph 24 of the agreement provides: P 24. Government Actions Affecting Settle- ment. If any administrative proceeding or action is commenced by any federal (except NHTSA), state or local governmental authority in a parens patriae function (and not in its capacity as an owner of any Minivan that has opted-out of the Settlement Class) asserting claims within the scope of the Action, the Class Plaintiffs and Settlement Class Counsel shall intervene in that action at the request of Chrysler. They shall intervene to fully support Chrysler by asserting that the governmental action is within the scope of this agreement, the Class Action Complaint, and the judgment entered herein. Any time and expense incurred by the Class Plaintiffs and Settle- ment Class Counsel shall be deemed to be within the application(s) referenced in paragraph 14. Addition- ally, in the event any action is commenced by a gov- ernmental authority as stated in this paragraph, Chrysler shall have the option, in its sole discretion, to immediately suspend relief to citizens of that jurisdiction pending the outcome of the suit brought by the governmental authority.The Attorneys General claim this provision is unfair andunreasonable because it will have a "chilling effect" on stateenforcement. "For example," they claim, "if a governmentalagency were to initiate an enforcement action relating to thedefective latch or the latch replacement program, such as fordeceptive advertising of the program, Chrysler would havethe discretion to suspend relief in the applicable jurisdiction."The effect is to place relief "outside the control of the class"and dependent upon the actions of nonparties to the action.Paragraph 24 survives for several reasons. First, paragraph24 does not prohibit any government action. The attorneysgeneral remain free to act as they see necessary to enforce theconsumer laws of their state. Chrysler and Class counsel can-not not prohibit state enforcement and never argued theycould. Any "chilling effect" on state enforcement that flowsfrom the settlement agreement comes from the danger thatChrysler will decide to contest the state action, invoke para-graph 24 of the settlement, and impose a delay on minivanowners. The chilling effect then comes from the potentialanger of class members -- who knowingly agreed to the set-tlement provisions, including paragraph 24, did not opt out,and readily accepted the benefits of the agreement -- at theattorney general of their state for interfering with their receiptof the benefits of the settlement. The only impact of para-graph 24 falls on the plaintiff class members and they haveagreed - by their inclusion in the class - to assume the risk.Second, paragraph 24 has been included in the SettlementAgreement from the beginning. Class members had noticethat they were exchanging their state rights for the contractualpromises of the Agreement and the vast majority of the classagreed. Class Counsel is required by the agreement to comeforward and explain this fact in any state enforcement pro-ceeding, an appearance that would most likely be helpful toa court, rather than a hindrance.Third, paragraph 24 is limited to local, state or federalenforcement actions that are within the scope of the settlementagreement. If, for example, there was evidence of fraud in theadvertising of the replacement latch program, this would notfall under the original complaint. As a result, the state attor-neys general would be free to bring an action and Chryslercould not suspend relief.Again, we reiterate that the district court was not free toredraft the agreement, or strike out certain parts it found to beproblematic. We do not think the inclusion of paragraph 24warrants rejection of the agreement.V.We review a district court's award of attorneys fees for anabuse of discretion. In re Washington Public Power SupplySystems Sec. Litig., 19 F.3d 1291, 1296 (9th Cir. 1994)("WPPSS").At Chrysler's insistence, class counsel and Chrysler did notnegotiate or discuss attorneys fees until after the final settle-ment agreement was presented to the court. The parties thenmet with retired California Superior Court Judge ColemanFannin in a fee mediation session. They eventually agreed toa fee of $5 million coupled with $200,000 in costs; JudgeFannin's affidavit indicated that he initially recommended thisamount. The mediator's role did not include evaluating thebenefits of the settlement so Judge Fannin had no way toascertain whether $5 million was an appropriate percentagerecovery. His affidavit was submitted only to certify that thefigure was the result of legitimate arms-length negotiations.[25] Contrary to the objectors' contention, we do notbelieve the weight the district court gave to the mediation pro-ceeding was an abrogation of its duty to determine indepen-dently whether the fee award was proper. Rather, the courtrelied on the mediator as independent confirmation that thefee was not the result of collusion or a sacrifice of the inter-ests of the class, an inquiry the court was required to make.More importantly, Judge Legge appears to have reviewed theaward using a lodestar methodology by requiring class coun-sel to submit detailed evidence of their work on behalf of theclass. The choice of method for determining attorney fees isalso reviewed for an abuse of discretion. WPPSS , 19 F.3d at1296.This court has affirmed the use of two separate methods fordetermining attorneys fees, depending on the case. In"common-fund" cases where the settlement or award createsa large fund for distribution to the class, the district court hasdiscretion to use either a percentage or lodestar method. Id. at1295. The percentage method means that the court simplyawards the attorneys a percentage of the fund sufficient toprovide class counsel with a reasonable fee. Paul, Johnson,Alston & Hunt v. Graulty, 886 F.2d 268, 272 (9th Cir. 1989).This circuit has established 25% of the common fund as abenchmark award for attorney fees. Six (6) Mexican Workersv. Arizona Citrus Growers, 904 F.2d 1301, 1311 (9th Cir.1990).[26] Although no class member is entitled to a cash recov-ery - making valuation of the settlement agreement more dif-ficult - Chrysler and class counsel valued the settlement at$115 million. This is the amount Chrysler charged against itsearnings in order to account for its voluntary service actionand the production and installation of the replacement latches.The fee award of $5.2 million represents roughly 4.5% of this"common fund", significantly less than the 25% commonlyused under Six Mexican Workers. We note, however, that thecourt rejected the idea of a straight percentage recoverybecause of its uncertainty as to the valuation of the settlement.In employment, civil rights and other injunctive relief classactions, courts often use a lodestar calculation because thereis no way to gauge the net value of the settlement or any per-centage thereof. The lodestar calculation begins with the mul-tiplication of the number of hours reasonably expended by areasonable hourly rate. Blum v. Stenson,
465 U.S. 886
, 897(1984). The hours expended and the rate should be supportedby adequate documentation and other evidence; thus, attor-neys working on cases where a lodestar may be employedshould keep records and time sheets documenting their workand time spent. The resulting figure may be adjusted upwardor downward to account for several factors including the qual-ity of the representation, the benefit obtained for the class, thecomplexity and novelty of the issues presented, and the riskof nonpayment. Kerr v. Screen Extras Guild, Inc. , 526 F.2d67, 70 (9th Cir. 1975).[27] Class counsel presented affidavits to the district courtjustifying their fees on the basis of their work on the individ-ual state class actions. The fee award also includes all futureservices that class counsel must provide through the life of thelatch replacement program. They must remain available toenforce the contractual elements of the settlement agreementand represent any class members who encounter difficulties.The factual record provides a sufficient evidentiary basis forthe district court's approval of the fee request. The lodestarcalculation received further support from the mediator's rec-ommendation, although we note that such a recommendationis never the starting point for calculation of a fee award. Wefind no abuse of discretion.VI.The certification of the settlement class, the approval of theclass settlement and the fee award were well within the guide-lines provided by Amchem and Fed. R. Civ. P. 23. Accord-ingly, we affirm the judgment of the district court. the end
___________________________FOOTNOTES 1 The Honorable John W. Sedwick, United States District Judge for theDistrict of Alaska, sitting by designation.2 The Louisiana action, the first state action to commence, was filed inApril 1994. It was followed by actions in Alabama (filed April 1994),Texas (filed in June 1994), California (two actions filed in December1994), and New York (filed in March 1995).3 The Attorneys General of Connecticut, Arizona, Iowa, Kansas, NewYork, Nevada, Oklahoma, Pennsylvania, Rhode Island, and Vermontjoined in the amicus brief.