Class action notice in the digital age.

Author:Aiken, Alexander W.
 
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Technology is advancing dramatically each year, reshaping our society in the process. Despite these rapid changes, however, many federal courts continue to rely on traditional means of disseminating notice, including mail and newspapers, to inform class action members of their rights. As technology continues to progress in the digital age, these methods are becoming increasingly anachronistic. Inadequate notice risks a class member not learning of the action, and failing to learn of an action risks an individual losing a potentially large claim. Moreover, inadequate notice may open a judgment or settlement to direct or collateral attack.

Recognizing limitations in traditional forms of notice, some courts and parties have begun using modem technologies. They are using email notice to deliver individual notice, and banner and pop-up advertisements on websites, as well as dedicated websites, to try to reach unknown class members. Although these efforts are a promising first step, courts and parties can do more. For example, machine learning systems--which analyze massive accumulations of data to discern unobserved patterns--could be used to identify previously unknown class members, with the ultimate goal of sending them individual notice. Social media also offers an inexpensive way for parties to reach a potentially vast, diverse class. Finally, text messaging could allow parties to deliver notice directly to class members in a matter of seconds. In the digital age, it is imperative that courts and parties harness modern technologies to provide the best notice practicable and protect the interests of class members.

INTRODUCTION 969 I. THF STANDARDS GOVERNING ACTION NOTICE 972 A. Rule 23 972 B. Due Process 974 II. TRADITIONAL METHODS OF PROVIDING NOTICE AND THEIR CONTINUED USE: 976 A. Standard Mail 977 B. Publication Notice 979 C. Television and Radio 982 D. A Changing World for Traditional Media 983 III. THE IMPACT OF MORDERN TECHNOLOGY ON CLASS ACTION NOTICE 984 A. Individual Notice Via Email 985 B. Supplemental and Construction Notice: over the Internet 990 1. Banner and Pop-Up Advertisements 990 2. Keyword Search Results 992 3. A Defendant Company's Website 993 4. Dedicated Websites 994 5. General Observations 994 IV. NFW TECHNOLOGIES IN CLASS ACTION NOTICE 997 A. Machine Learing: Identifying Class Members and Tailoring Notice 997 1. The Basics of Machine Learning 997 2. The Practicality of Machine Learning Systems and Class Action Notice 1001 3. How Machine Learning Systems Can Benefit Class Action Notice 1003 a. Identifying Unknown Class Members 1003 b. Tailoring Notice 1007 4. The Limitations of Machine Learning Systems 1008 B. Social Media 1011 1. Facebook Messaging 1011 2. Notice Posted on a Defendant's Social Media 1012 3. Social media of Class Counsel or Class Representatives 1012 4. The Benefits of Social Media 1013 5. The Limitations of Social Media 1014 C. Text Messaging 1014 CONCLUSION 1016 INTRODUCTION

Technological innovations are reshaping our society in profound ways. Cellphones, laptops, and tablets are becoming smaller, sleeker, and faster.(1) We can now communicate with millions across the globe instantly with the click of a mouse.(2) Social media has helped to spark revolutions.(3) Organizations are using huge amounts of data to better understand and reach consumers with increasingly targeted advertisements.(4) We may even be able to communicate telepathically one day.(5) All of this is to say that we live in a world where yesterday's science fiction is increasingly becoming contemporary reality.

Despite the dramatic technological innovations of the last few decades, however, many federal judges and practitioners continue to rely on traditional means of disseminating notice, including mail(6) and newspapers,(7) to inform class members of their rights. These methods of disseminating notice are becoming anachronistic. As one notice expert has commented,

When people running businesses advertise, they actually desire to inform their intended audiences, and they do so with marketing campaigns that are designed to grab attention, be understood, and acted upon. They do not run small ads in the back of newspapers or send mailings in "fine-print" to last-known addresses captured many years ago. Unfortunately, this approach passes muster for class action notices in too many courts.(8)

Failing to employ the best means of notice risks a class member not learning of the litigation, and "a person who doesn't hear about a class action that includes him/her loses his/her property rights--potentially for a very big claim."(9) Inadequate notice may also open a judgment or settlement to direct or collateral attack.(10) It is therefore imperative that courts and parties use the best available means to disseminate notice to class action members. Unfortunately, the traditional means widely employed do not suffice in the modern world.

Recognizing the limits of traditional methods of providing notice, some courts and parties have started employing modern technologies, particularly the internet, to deliver notice. Email notice is becoming more common, especially in class actions involving internet companies.(11) Banner and pop-up advertisements on websites have begun supplanting newspapers as the preferred means of trying to notify unknown class members of their rights.(12) And websites created solely to provide information on a given class action have become a mainstay of notice practices.(13) With the growing importance of the internet, these methods of disseminating notice are likely here to stay and will only expand going forward.(14) Courts and parties should be receptive to them.

But courts and parties can do more. Recent technological innovations offer new means of ensuring that class members receive the "best notice that is practicable under the circumstances."(15) Machine learning systems are a relatively new technology capable of analyzing large accumulations of data to detect unobserved patterns. In the context of class action notice, these systems could help courts and parties find previously unidentified class members, with the end goal of providing individual notice. They could also help parties to tailor notice plans to a given class's media uses. In addition, social media could provide an inexpensive way for parties to reach a potentially large and diverse class. And finally, text messaging could allow parties to deliver notice to class members directly and in a matter of seconds. In the digital age, courts and parties should harness these technologies to improve notice plans and protect the interests of class members.

This Comment proceeds as follows. Part I sets forth the standards that govern class action notice. Part II examines how courts have traditionally provided notice. The discussion focuses on standard mail, newspapers, magazines, television, and radio. I argue that, although these forms of notice have continuing usefulness in certain instances, they also have limitations that courts and parties can and should address through the use of modern alternatives.

Part III discusses the ways in which courts and parties are using new technologies, particularly the internet, to provide notice. I review courts' increasing reliance on email to provide individual notice to class members. I also discuss the ways in which courts and parties are utilizing banner and pop-up advertisements, keyword search results, and dedicated websites to supplement individual notice and/or provide constructive notice. I ultimately argue that these forms of notice should be the focal point of notice plans going forward because they allow class counsel to target notice to individual persons, they are relatively inexpensive, they generally reach larger audiences, and they allow greater interactivity between class members and class counsel.

Part IV then discusses relatively new technologies that courts and parties should consider using, or should use with greater regularity. I focus first on machine learning systems and argue that courts and parties can use this technology not only to identify potential class members, but also to determine the best means of reaching them. I also argue that courts and parties should use social media and text messaging more frequently to supplement notice.

This Comment concludes with an examination of a proposed change to Federal Rule of Civil Procedure 23 that, if adopted, would explicitly authorize courts to provide notice electronically. I fully endorse the current wording and the overall sentiment driving the amendment. It makes clear that courts and parties ought to embrace electronic notice, both when trying to provide individual notice and when trying to provide supplemental or constructive notice. In conclusion, I suggest that, because it is impossible to know how technological advances will shape communication in the future, courts must be willing to embrace new technologies as they develop and become widespread.

  1. THE STANDARDS GOVERNING CLASS ACTION NOTICE

    To understand the different mediums through which courts and parties disseminate notice to class members, some background is necessary. In federal court, class action notice plans are subject to two interrelated requirements. First, the program must meet the requirements of Federal Rule of Civil Procedure 23 (Rule 23).(16) Second, and underlying the requirements of Rule 23, the program must satisfy certain constitutional considerations of procedural due process.(17)

    It is imperative that parties satisfy these requirements; otherwise, a judgment or settlement may be open to direct(18) or collateral attack,(19) undermining its finality. Failing to provide adequate notice may also deprive class members of substantial property rights, as a class member who is unaware of the action might be unable to exercise rights arising from it.(20) For these reasons, litigants cannot treat notice decisions lightly.

    1. Rule 23

      Rule...

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