536 U.S. 1 (2002)
Robert Devlin, a retired worker represented by the Transportation Communications International Union, participates in a defined benefits pension plan administered by the Union.1 In 1991, on the recommendation of the Plan's trustees, the Plan was amended to add a cost of living adjustment for retired and active employees.2 The Plan was not able to support such a large benefits increase.3
To address this problem, the Plan's new trustees sought to freeze the COLA.4 Because they were concerned about incurring ERISA liability by eliminating the COLA for retired workers, the trustees froze the COLA only as to active employees.5 The new trustees obtained an equitable decree from the United States District Court for the District of Maryland in 1995.6 The decree declared that the former trustees had breached their fiduciary duties and that ending the COLA for retired workers would not violate ERISA.7 Accordingly, in a 1997 amendment, the new trustees eliminated the COLA for all Plan members.8
In October 1997, those trustees filed the present class action in the United States District Court for the District of Maryland, seeking a declaratory judgment that the 1997 amendment was binding on all Plan members or, alternatively, that the 1991 COLA amendment was void.9 Petitioner was proposed as a class representative for a subclass of retired workers but refused to become a named representative.10 He instead brought a separate action in the United States District Court for the Southern District of New York, arguing that the 1997 Plan amendment violated the Age Discrimination in Employment Act of 1967.11 The New York District Court dismissed petitioner's claim, which was affirmed by the Second Circuit.12
The Maryland district court conditionally certified the class under Federal Rule of Civil Procedure 23(b)(1), dividing it into two subclasses: a subclass of active employees and a subclass of retirees.13 Devlin sent letters to the court in April and May 1999 informally requesting intervention.14 Also in May, the Plan's trustees and the class representatives agreed on a settlement whereby the COLA benefits would be eliminated in exchange for the addition of other benefits.15 On September 10, 1999, petitioner formally moved to intervene pursuant to Federal Rule of Civil Procedure 24.16 On November 12, 1999, the District Court denied petitioner's intervention motion as "absolutely untimely."17 It then heard objections to the settlement, including those advanced by petitioner, and, concluding that the settlement was fair, approved it.18 Shortly thereafter, petitioner noted his appeal.19 The Court of Appeals for the Fourth Circuit affirmed the District Court's denial of intervention under an abuse of discretion standard.20 It further held that, because petitioner was not a named representative of the class and because he had been properly denied the right to intervene, he lacked standing to challenge the fairness of the settlement on appeal.21 Petitioner sought review of the Fourth Circuit's holding that he lacked the ability to appeal the District Court's approval of the settlement.22
Whether a nonnamed member of a certified class who objects to a proposed settlement at the fairness hearing may appeal the district court's approval of the settlement without first intervening in the litigation?23
Only parties to a lawsuit, or those that properly become parties, may appeal an adverse judgment, but nonnamed class members who object at the fairness hearing qualify as parties for purposes of appealing settlement approval because they are bound by the judgment and their interests diverge from the class representatives.24
Yes. Nonnamed class members like petitioner who have objected in a timely manner to approval of the settlement at the fairness hearing have the power to bring an appeal without first intervening.25 Devlin was a member of the retiree class bound by the judgment.26 He objected to the settlement at the District Court's fairness hearing as permitted by Rule 23(e).27
The District Court's approval of the settlement amounted to a final decision of his right or claim sufficient to trigger his right to appeal.28 Petitioner's right to appeal cannot be effectively accomplished through the named class representative because once the named parties reach a settlement approved over his objections, his interests by definition diverge from those of the class representative.29 The constitutional requirements of injury, causation, and redressability are satisfied by his interest in the settlement.30 Prudential standing concerns are absent because he raises his own legal rights within the zone of interests protected by the fairness requirement.31
Treating such objectors as parties for appeal purposes aligns with precedents allowing nonnamed persons bound by orders to appeal and does not undermine class action administration, as the right is limited to those who objected below.32
A nonnamed class member who objects at the fairness hearing may appeal the district court's approval of the settlement without first intervening.33
Related opinions on this issue
Justice Scalia dissented on the ground that only persons named as parties in the complaint or those who intervene or enter through third-party practice are parties to the judgment and thus entitled to appeal.34 He maintained that being bound by the judgment through class representation does not confer party status, as the Restatement makes clear that represented persons are bound as though parties but are not parties themselves.35 Scalia argued that the majority's context-dependent approach to party status, tied to the goals of class action litigation, destroys the bright-line rule and introduces unacceptable indeterminacy.36
He further contended that requiring intervention for appeal would enable district courts to perform a valuable screening function by verifying class membership, timeliness of objections, and whether objections were already resolved, thereby sparing appellate courts unnecessary review of meritless or procedurally defective appeals.37