Limiting coercive speech in class actions.

• Author: Greenawalt, Andrei

Introduction I. Gulf Oil V. Bernard And Its Application By Lower Courts A. Approaches to Class Communications Prior to Bernard B. Bernard: The End of Pervasive Limitations on Communications in Class Actions C. Lower Court Applications of Bernard to Defendant Communications 1. Reading Bernard To Require Evidence That Inappropriate Communications Have Occurred 2. Reading Bernard To Allow for Prophylactic Restrictions on Defendant Communications II. Limitations on Communications and the Goals of Rule 23 Class Action Litigation A. Restricting Speech To Advance the Ends of Justice and the Goals of Rule 23 B. Structurally Coercive Relationships C. Defendant Communications in Structurally Coercive Relationships III. Prophylactic Orders Limiting Defendant Communications In Structurally Coercive Relationships A. Why Prophylactic Orders Are Desirable B. A Proposal for Prophylactic Restrictions IV. First Amendment Concerns and Other Objections A. The First Amendment and Employer Interests in Communicating with Employees B. Other Objections to Prophylactic Limitations Conclusion Introduction

As the class action lawsuit has emerged as a complex and important device of civil litigation, it has become a source of significant controversy for courts, the political branches, and scholars. Beyond disputes about their general efficacy, (1) class actions raise a number of difficult challenges related to the "unique responsibilities" they impose on courts. (2) Many of the managerial complexities facing judges stem from the fact that named plaintiffs and their counsel typically represent many unnamed plaintiffs not actively involved in the lawsuit. Concerns about protecting absent class members pervade class action law, whether in requirements that the class representative be adequate, that settlements be fair to all class members, that there be opportunities for class members to voice their concerns, or that class members be able to opt out.

This Note examines one such issue: the extent to which judges can and should issue prophylactic orders limiting communications between defendants and potential class members when defendants are involved in a structurally coercive relationship with potential class members. (3) By structures of coercion I mean those relationships where the speaker and potential class members have an ongoing business relationship in which potential class members depend financially on the speaker. Although one can imagine situations where named plaintiffs have coercive influence over potential class members, (4) coercion more commonly arises where potential class members are in ongoing business relationships with defendants. Therefore, this Note addresses defendant communications in the context of structurally coercive relationships, focusing on the paradigmatic employer-employee relationship. (5)

The Manual for Complex Litigation recognizes that "[d]irect communications ..., whether by plaintiffs or defendants, can lead to abuse," (6) and courts have long agreed that it is their responsibility "to safeguard [class members] from unauthorized, misleading communications from the parties or their counsel." (7) At the same time, courts have realized that restrictions on speech between litigants raise First Amendment concerns. (8)

In order to guard against possible abuses, previous editions of the Manual recommended sweeping restrictions on communications; as a result, for years courts routinely adopted local rules and issued protective orders that prohibited named parties and their counsel from communicating with potential class members. But in 1981, a unanimous Supreme Court in Gulf Oil Co. v. Bernard struck down a protective order that prevented the NAACP from communicating with potential class members in a case alleging racial discrimination. (9) Rejecting the broad prophylactic orders recommended by the Manual, the Court held that "an order limiting communications between parties and potential class members should be based on 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." (10) Today, because of Bernard, courts analyze limitations on both plaintiff and defendant communications on a case-by-case basis and usually require evidence that potentially abusive communications have occurred.

This Note argues that Bernard can and should, as a matter of policy, be interpreted to allow prophylactic orders limiting communications when a structurally coercive relationship exists between defendants and potential class members. (11) Communications in these contexts present distinctive problems. (12) First, speech can intimidate potential class members and pressure them to make decisions about participating in the class based on a fear of retaliation rather than on independent analysis. Second, because potential class members may generally rely on the defendant for information about issues affecting the company, they may mistakenly trust one-sided or misleading defendant communications.

Part I discusses the justifications for the routine imposition of broad restrictions prior to Bernard as well as emerging Supreme Court doctrine on attorney solicitation in the years preceding Bernard. It then examines Bernard, the only Supreme Court opinion on the subject of class communications. Finally, it explains how lower courts have applied Bernard, noting that only a few have issued prophylactic orders based on structurally coercive relationships without evidence that inappropriate communications have occurred.

Part II examines the ways in which limitations on communications may or may not advance the goals of class action litigation. The broad limitations at issue in Bernard frustrated the objectives of Rule 23. By contrast, when defendants hold a structurally coercive position over potential class members, there is particularly great potential for abusive communications, which justifies some limitations. Focusing on the employer-employee relationship, Part II surveys sexual harassment and union election cases and literature in order to identify the dynamics of coercion in the workplace.

Part III proposes that courts issue certain prophylactic limitations upon a finding that a structurally coercive relationship exists between defendants and potential class members. Specifically, I suggest that where such a relationship exists, courts should generally prohibit defendants from communicating orally about the litigation with potential class members and should require that written communications be filed with the court and opposing counsel. Finally, Part IV addresses possible First Amendment and other objections to the prophylactic limitations proposed in Part III.

This Note contributes to existing literature by focusing on the problem of structurally coercive relationships in class action lawsuits. (13) It explains and expands on a position staked out by just a few courts, and it provides specific suggestions to courts adjudicating class action lawsuits. In addition, although this Note deals with the particular problem of communications with potential class members, it may more broadly help illuminate the dynamics of workplace coercion and possible remedies to combat it.

1. GULF OIL V. BERNARD AND ITS APPLICATION BY LOWER COURTS

   1. Approaches to Class Communications Prior to Bernard

      Following the recommendations of previous editions of the Manual for Complex Litigation, courts once routinely imposed broad bans on communications with potential class members. As a result of "unfortunate experiences where parties and counsel have abused the class action process," (14) the 1973 Manual "recommended that each court adopt a local rule forbidding unapproved direct or indirect written and oral communications by formal parties or their counsel with potential and actual class members." (15) However, in addition to suggesting that courts should allow nonabusive communications proposed by the parties, the Manual also stated that client-initiated contact and regular business communications should be exempt from the ban. (16) Prior to Bernard, numerous courts heeded the Manual's advice by adopting local rules that prevented unauthorized communications (17) or by issuing protective orders that had largely the same effect. (18) Some courts discussed First Amendment concerns, (19) but most did not, and the Manual's recommendations for a time enjoyed "ubiquitous" application. (20)

      The 1973 Manual specified four general areas of potential abuse that justified the default imposition of local rules or orders prohibiting communications with the class:

      (1) solicitation of direct legal representation of potential and actual class members who are not formal parties to the class action; (2) solicitation of funds and agreements to pay fees and expenses from potential and actual class members who are not formal parties to the class action; (3) solicitation by formal parties of requests by class members to opt out ...; and (4) unauthorized direct or indirect communications from counsel or a party, which may misrepresent the status, purposes and effects of the action and of court orders therein and which may confuse actual and potential class members and create impressions which may reflect adversely on the court or the administration of justice. (21)

      Although the third area specifically addressed a type of defendant communication and the fourth area encompassed defendant communications, courts and scholars in the years preceding Bernard largely focused on issues surrounding the communications of named plaintiffs and their counsel. (22)

      Concerns about the effects of plaintiff communications largely stemmed from longstanding arguments about the harms of solicitation. As the Supreme Court noted in Ohralik v. Ohio State Bar Ass'n, the "substantive evils of solicitation have been stated over the years in sweeping terms: stirring up litigation, assertion of...