Contacts with class members: when will courts intervene?

• Author: Vale, Anthony

Writing in the July newsletter of the Class Actions and Multi-party Litigation Committee, Anthony Vale and Jennifer Albright of Pepper Hamilton, Philadelphia, discuss problems raised by extra-judicial contacts with class members:

Courts long have recognized the potential for abuse that may occur when communications unsupervised by the court are made to members of a class or a putative class. Misleading communications to class members pose a threat to the fairness of the proceedings, the fundamental rights of the parties, the adequacy of the representation, and the general administration of justice. In re School Asbestos Litigation, 842 F.2d 671, 680 (3d Cir. 1988). Because of the potential for abuse, courts have "both the duty and the broad authority to ... enter appropriate orders governing the conduct of counsel and parties." Gulf Oil Co. v. Bernard, 452 U.S. 89, 100 (1981).

Sources of "broad authority"

There are three sources for this "broad authority"--Rule 23(d)3 of the Federal Rule of Civil Procedure, Rule 4.2 of the American Bar Association Model Rules of Professional Conduct, and the inherent powers of courts. The U.S. Supreme Court has required that before issuing any order, courts establish "a clear record and specific findings that reflect a weighing of the need for a limitation and the potential interference with the rights of the parties." Gulf Oil, 452 U.S. at 101.

Model Rule 4.2 prohibits an attorney from discussing the subject matter of a case with other represented parties unless the attorney obtains consent from opposing counsel. Class counsel represents all members of a certified class, but whether counsel represents putative class members prior to certification evokes disagreement among the courts. Most courts do not consider class counsel as representing putative class members. Garrett v. Metropolitan Life Insurance Co., 1996 U.S.Dist. Lexis 8054 (S.D. N.Y.); Babbitt v. Albertson's Inc., 1993 U.S.Dist. Lexis 18801 (N.D. Cal.; Fulco v. Continental Cablevision Inc., 789 F.Supp. 45 (D. Mass. 1992). See also MANUAL FOR COMPLEX LITIGATION (THIRD) [section] 30.24, at 233 (1995); RESTATEMENT a, (THIRD) OF THE LAW GOVERNING LAWYERS al [section] 99, cmt. a. Contra Dondore v. NGK Metals Corp., 152 F.Supp.2d 662 (E.D. Pa. 2001). See generally Bassett, Pre-certification Communication Ethics in Class Actions, 36 GA. L. REV. 353, 410 (Winter re 2002).

Effect of First Amendment

Exercise of the court's "broad authority" to restrict communications with class members must be consistent with the First Amendment. Courts should narrowly tailor orders restricting such communications so as to limit speech only to the extent necessary to protect the interests of the class members. Commercial speech--that is, speech that serves the economic interests of the speaker--receives First Amendment protection as long as it is not misleading, and restrictions on it are analyzed under an intermediate scrutiny test. See Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 556, 566 (1980); Zauderer v. Office of Disciplinary Counsel of the Supreme Court of Ohio, 471 U.S. 626, 638 (1985); Florida Bar v. Went for It Inc., 515 U.S. 618, 623 (1995).

Four common situations

There are four common situations in which problems arise when a party wishes to communicate with class members: (1) advertisements or other initial contacts by plaintiffs' counsel aimed at putative class members; (2) communications by defendants to class members about the merits of the class action; (3) attempts to persuade class members not to participate or to opt out of the class action; and (4) settlements proposed directly to putative class members.

1. Plaintiffs' attorney advertising and other contacts

   The filing of a class action, with its attendant publicity, provides a platform for attorneys to solicit clients from the pool of putative class members and to conduct a publicity campaign against the defendant. Courts addressing this issue have stopped such communications altogether or restricted those identified by the courts a misleading.

   In Jackson v. Motel Multipurpose Inc., 130 F.3d 999, 1003 (11th Cir. 1997), the 11th Circuit suggested that a court should not allow any communications between...