Notice

In the majority of class actions, namely, those brought pursuant to section 23(b)(3) (the class seeking monetary damages), the duty of compliance with due process requirements to ensure finality requires some method for absent class members to opt out of the original action. The notice must advise each absent class member of the right to opt out without stating any reason therefore.

It is not uncommon to see or receive notices of class actions relating to pending settlements or certification that are replete with mind-numbing, obtuse legalese mumbo-jumbo. There are lawyers’ strategies that often drive mere window dressing class notices filled with purposefully long, convoluted sentences that ignore the transmission of information essential to absent class members; the person for whom the action was brought in the first place.

It is not lost on the majority of ethical class action lawyers that game playing with the notice for some unseemly ulterior motive has been a leading cause of the public disfavor that is alive and well in legislative bodies and among the populace.

To correct the problem of notices to class members that contain sentences and difficult to understand language the U.S. Supreme Court changed to procedural rule. The new rule says:

For any class certified under Rule 23(b)(l) or (2), the court may direct appropriate notice to the class. For any class certified under Rule 23(b)(3). The court must direct to class members the best notice practicable under the circumstances. including individual notice to all members who can be identified through reasonable effort. The notice must concisely and clearly state in plain, easily understood language: the nature of the action: the definition of the class certified: the class claims, issues, or defenses; that a class member may enter an appearance through counsel if the member so desires: that the court will exclude from the class any member who requests exclusion, stating when and how members may elect to be excluded; and the binding effect of a class judgment or, class members under Rule 23(c)(3).

The class action bar who value the procedure and recognize the public benefit of representative litigation to maintain a level playing field for consumers, the small investor and those injured by institutionalized practices, welcome the new rule: at least a majority of that bar does.

The notice must be sent to each absent class member in an action for monetary relief must be by the best delivery practicable under the circumstances. Usually, that means by first class, U.S. Postal Service mail. The notice must advise that there is a class action lawsuit pending in a specific court and advise the recipient of the right to exclude himself, or opt-out, from the action. In plain, concise and everyday easily understandable language the notice must inform the class member of the following:

the nature of the lawsuit
the class as defined in the Court’s certification order
the claims of the class
the issues raised
the defenses (if any)
the right to enter an appearance in the action
the right of self-exclusion – to opt-out of the class including the means to do so
the binding effect of any judgment in the case

The rule requires that the notice be worded in neutral terms.

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