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Attorneys Beware: The Dangers of Communicating with Potential Class Members in a Class Action
Practical Law Legal Update 8-554-3385 (Approx. 4 pages)
Attorneys Beware: The Dangers of Communicating with Potential Class Members in a Class Action
by Practical Law Litigation
| Published on 21 Jan 2014 • USA (National/Federal) |
This Legal Update addresses the risks associated with communicating with potential class members in a class action.
A lawsuit does not become a class action unless and until the court enters an order certifying that the case satisfies the criteria set out in Rule 23 of the Federal Rules of Civil Procedure (FRCP). Counsel must be careful when communicating with potential class members before the entry of a certification order, as these communications can lead to ethical violations and other consequences in the action.
Why Would Counsel Communicate with Potential Class Members?
There are many reasons why counsel may need to communicate with potential class members before certification.
For example, the plaintiffs' counsel may want to:
- Solicit qualified individuals to join the class (see Shapero v. Ky. Bar Ass'n, 486 U.S. 466, 476, 479-80 (1988)).
- Gather information to assist in establishing the prerequisites for class certification (for example, commonality or typicality) (see Johnson v. Bankers Life & Cas. Co., No. 13-cv-144, , at *2 (W.D. Wis. Sept. 30, 2013)).
In contrast, the defense may want to:
- Negotiate a settlement with potential class members (see Weight Watchers of Phila., Inc. v. Weight Watchers Int'l, Inc., 455 F.2d 770, 773 (2d Cir. 1972)). For more information on settling class actions, see Practice Note, Settling Class Actions: Practice and Procedure.
- Communicate with potential class members about a product that is the subject of the action (see Reid v. Unilever U.S., Inc., No. 12-cv-06058, , at *27-28 (N.D. Ill. Aug. 7, 2013)).
- Investigate the plaintiffs' allegations (see McLaughlin v. Liberty Mut. Ins. Co., 224 F.R.D. 295, 299 (D. Mass. 2004)).
- Gather information to assist in defeating a motion for class certification (see Bobryk v. Durand Glass Mfg. Co., No. 12-cv-5360, , at *2 (D.N.J. Oct. 9, 2013)).
Which Ethical Rules Could These Communications Violate?
Depending on the context, content and intent, pre-certification communications with potential class members may violate the American Bar Association's Model Rules of Professional Conduct (Model Rules) and corresponding state ethical rules prohibiting:
- Communications with a person the lawyer knows to be represented by another lawyer in the matter (Model Rule 4.2).
- False or misleading communications about the lawyer's services (Model Rule 7.1).
Communications with a Represented Party
There is not complete uniformity among courts regarding whether pre-certification communications with potential class members violate Model Rule 4.2, however the weight of authority suggests that potential class members are not represented until the class is certified (see Hammond v. City of Junction City Ks., No. 00-cv-2146, , at *4 (D. Kan. Jan. 23, 2002)). Courts in jurisdictions that permit defendant's counsel to communicate with potential class members generally allow these communications absent a showing of abuse or coercive tactics (see Reid, , at *29; but see A & R Body Specialty & Collision Works, Inc., v. Progressive Cas. Ins. Co., No. 07-cv-929, , at *4 (D. Conn. Sept. 5, 2012) (prohibiting defense counsel from communicating with potential class members about settling claims despite there being no record of any threats or coercion to the putative class members)).
Model Rule 4.2 may also apply where plaintiffs' counsel attempts to communicate with potential class members who also are senior or managerial employees of the defendant. These individuals may be represented by the defendant's counsel by virtue of their job-related responsibilities and authority (see Hammond, , at *9).
False or Misleading Solicitation
Plaintiffs' counsel must be wary when seeking to enlarge the class through solicitation, which may violate Model Rule 7.1 if it:
- Is not clearly an advertisement.
- Does not disclose all material facts about the action.
- Does not provide adequate disclosure of the costs and benefits of participating in a class action.
(See Model Rule 7.1-7.3; In re McKesson HBOC, Inc. Sec. Litig., 126 F. Supp. 2d 1239, 1244-45 (N.D. Cal. 2000).)
Consequences of Improper or Abusive Pre-certification Communications
If a communication between counsel and a potential class member is considered improper or abusive, it may result in the following:
- An ethical violation by the lawyer.
- A court-ordered restriction, limitation or prohibition of contact between parties and potential class members (FRCP 23(d); Gulf Oil Co. v. Bernard, 452 U.S. 89, 99-100 (1981)).
- In the case of abusive conduct by the plaintiffs' counsel, a denial of class certification (see Yumul v. Smart Balance, Inc., No. 10-cv-00927, , at *4 (C.D. Cal. Oct. 8, 2010)).
For more information on navigating ethical and privilege issues in class actions, see Practice Note, Ethical and Privilege Issues in Class Action Communications.
For more information on class actions generally, see Practice Note, Class Actions: Overview.