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We brought you yesterday an example of a district court using Rule 23(d) to order a curative action vis-à-vis a putative class, but not in a good way.  In that case, a medical device manufacturer initiated a recall of certain lots and published recall information for patients, in coordination with the FDA.  Some enterprising plaintiffs’ attorney then filed a class action and succeeded in convincing the district judge to order the defendants to disclose in their recall communications that there was a pending case—one that is extremely unlikely to ever result in a certified class.  The defendant’s recall communications therefore turned into court-ordered plaintiff lawyer advertising.  Sheesh. 

Today we bring you a counter story, the yin to yesterday’s yang, an example of a district court using Rule 23(d) not to interfere with justice, but to promote it.  In Braswell v. Bow Plumbing Group, Inc., No. 2:21-cv-25, 2024 WL 2401782 (M.D. Ala. May 23, 2024), the product was not a medical device, but the facts are comparable to yesterday’s case because they too involved plaintiff’s lawyers trying to interfere with communications to putative class members. 

In Braswell, the plaintiffs sued over allegedly defective plastic plumbing and later agreed to a class settlement.  The district court approved the parties’ proposed settlement and directed notice to the settlement class.  Days later, attorneys representing several of the individual plaintiffs sent their clients emails that “contain[ed] misleading or inaccurate statements regarding the proposed class action settlement and associated proceedings in this case.”  Id. at *1.  These attorneys were essentially encouraging their clients to pursue individual claims and opt out of the settlement, but were doing do in a misleading way.  The court therefore entered an order finding that the emails “materially interfered” with class notice and the court’s efforts to “fairly, accurately, and reasonably inform[ ] the settlement class members of the proposed settlement terms.”  Id.  The court further found that counsel’s misinformation risked coercing class member to opt out of the settlement.  Id.

What did counsel do in response to this admonition?  They doubled down and emailed their clients again and falsely portrayed class counsel and the court as “delaying” their individual claims.  Worse yet, counsel emailed their clients yet again and suggested that they should not communicate with class counsel, despite a court order expressly allowing such communications.  Id.  The court-appointed settlement administrator ultimately received 322 opt-out requests, almost all from individuals represented by the email-happy, court-admonished attorneys.  Hundreds of the opt-out requests were dated before the settlement administrator even sent out class notice.  Id. at *2. 

You can see what was going on here.  Counsel did not like the terms of the settlement and were trying to use their individual clients to leverage a better deal.  They crossed the line, however, by sending serial emails that the court found to be misleading and inaccurate and by discouraging class members from communicating with class counsel.  As the district court saw it,

Based on these communications, as well as the date that many of the requests for exclusion were signed (i.e., before the Court’s curative notice or before the Court-approved notice of the settlement was even issued), the Court is highly concerned that a significant percentage of these requests for exclusion were caused, in whole or in part, by the inaccurate or incomplete information disseminated by [these] Attorneys . . . . 

Id. at *2.  This court certainly did not beat around the bush, and to correct the potential damage, the court basically ordered a do over. 

Invoking Rule 23(d)—which we conveniently laid out for you verbatim here—the court struck 319 opt-out requests and directed that each of those class members should receive additional curative notice of the proposed settlement terms.  Those class members would also receive a new opportunity to opt out, but this time with complete and accurate information about the settlement terms.  Id. at *3. 

We have to say, we like this solution.  If class members opt out, so be it.  But they need to make informed decisions.  That is the way the court saw it, too:

The Court finds that striking these opt-outs will protect the integrity of the class while imposing little to no prejudice on the affected class members because if those class members did, in fact, make a free and unfettered decision in choosing to [opt out], then they will do so again during the re-opened opt-out period.

Further, this Court has a responsibility to give class members “the best notice that is practicable under the circumstances.” FED. R. CIV. P. 23(c)(2)(b). It is essential that class members’ decisions to participate or to withdraw be made on the basis of independent analysis of their own self interest, and the vehicle for accomplishing this is the class notice. 

Id. at *3 (internal quotations and citations omitted).  Yes, this is a plastic pipe case, but after reading about the court’s misuse (in our opinion) of Rule 23(d) in yesterday’s medical device case, we thought it important to bring you this other side of the coin.