JOHN T. COPENHAVER, Jr., District Judge.
Pending are motions challenging the adequacy of the notice provided to class members, filed by movant Rachel Carrico on February 11, 2016 (ECF No. 581), and by movants Paula J. Compston, Charles Justice, and Cindra Justice on February 12, 2016. (ECF No. 583, 586). The motions seek an extension of time to opt out of the class and the issuance of an additional notice to class members. Movants are represented by counsel who also represent many of the approximately 2,100 individuals and businesses that have opted out of the class.
Subsequent to filing her motion, Rachel Carrico filed a supplement to the motion on February 12, 2016. (ECF No. 584). In a second supplemental filing, on February 18, 2016, Ms. Carrico also moved to intervene in this action. (ECF No. 599).
In this consolidated class action, plaintiffs bring a number of claims relating to a spill of the chemical Crude 4-methylcyclohexanemethanol ("Crude MCHM") into the Elk River in January 2014 and the resulting interruption of water service to residents and businesses in the affected area.
By order entered December 16, 2015, the court approved class plaintiffs' proposed notice plan, providing for notice to class members describing the certification of the action and the proposed settlements between the class and the two individual defendants, Gary Southern ($350,000) and Dennis P. Farrell ($50,000). (ECF No. 514). The notice plan provided for direct mailing of the approved notice to approximately 92,000 addressees identified by defendant West Virginia-American Water Co. as customers supplied water by the affected treatment plant on or around January 9, 2014. These addresses were checked by the notice administrator against the National Change of Address database maintained by the United States Postal Service. In addition, the notice was supplemented by newspaper publication on two consecutive Saturdays in the Charleston Gazette-Mail and local newspapers in Parkersburg, Point Pleasant, Huntington, Beckley, and Logan. Finally, the notice administrator maintained a toll-free helpline and a website to answer class member questions.
The notice, mailed to class members beginning December 21, 2015, described the class certification and partial settlement, and informed class members of their options as follows:
Order Preliminarily Approving Settlement and Form of Order on Class Certification, Exhibit A (December 16, 2015). (ECF No. 514-1).
One day before the court's February 12 deadline for class members to opt out or object to the individual defendants' settlement, movant Carrico filed her motion challenging the adequacy of the notice and requesting an extension of time to opt out, "for the benefit of [herself] and all putative, absent class members similarly situated." (ECF No. 581 at 1). Movant Carrico argues that the notice "is wholly inadequate and misleading and must be deemed ineffective to comply with F.R.C.P. 23 or the United States Constitution."
Carrico's motion identifies nine purported deficiencies in the court-approved notice. First, Carrico states generally that the notice is confusing, and that it does not make use of the "clear and concise language" required by Rule 23. In particular, Carrico objects to the form of notice chosen, arguing that the notice was not the "best notice that is practicable under the circumstances" because it was mailed as Presort 1st Class Mail, Bulk Mail on a folded sheet of paper, which she compares to "junk mail." Carrico claims that she contacted 63 class members and that 27 claimed not to have received the notice. In a later filing, Carrico submitted an exhibit reflecting a poll conducted by Gravitas Marketing, stating that a survey of 464 residents in Kanawha County showed that only 34% of class members recalled receiving a notice. (ECF No. 599-1).
Many of Carrico's objections relate to the court's decision to certify a Rule 23(b)(4) issue class as to liability only. Carrico argues that the notice does not adequately explain what will happen at the liability-only trial, how individual damages would be determined after a finding of fault, or what would be required of class members in order to obtain payment of those damages. These criticisms are echoed in the report by movants' expert, Mr. Hilsee.
The balance of Carrico's objections relate to other perceived omissions in the notice. Carrico argues that the notice should have identified the geographic area in which class members are located and ought to have contained more information regarding the composition of the class, in particular the number of class members. The movant suggests that without an estimate of the number of class members, recipients might misunderstand the amount they would receive from the proposed $400,000 settlement with the two individual defendants. Carrico also objects to the notice's description of the claims at issue in the case and the failure of disclosure respecting potential attorney's fees for class counsel.
In their response, class representative plaintiffs begin by objecting to the movants' appearance through counsel, and their motions regarding class notice, as procedurally improper. Plaintiffs argue that as non-parties, movants are not in a position to move this court for the relief requested. In addition, plaintiffs argue that movant Carrico's request to intervene should be denied because she cannot meet the requirements governing intervention set out in Federal Rule of Civil Procedure 24.
While they urge the court not to reach the merits of movants' objections, plaintiffs respond to each objection in order to support the adequacy of the court-approved notice. For example, plaintiffs reject the contention that to satisfy due process, the notice should have discussed the merits of alternative litigation progressing in state courts or the methods the court in this case might use to determine individual damages following the trial on liability issues. Plaintiffs defend the form and reach of the notice, while questioning the relevancy of movants' proffered surveys of class members to a determination of whether the selected notice constituted the best practicable under the circumstances. Defendants also filed a response opposing the motions, raising several of the same points.
In her reply to both plaintiffs and defendants, movant Carrico criticizes the notice's requirement that individual class members were required to opt out by submitting a signed request to opt out to the court, rather than allowing opt outs en masse through their attorneys.
Rule 23(c) of the Federal Rules of Civil Procedure provides that once a class is certified, unnamed class members "may enter an appearance through an attorney if [they] so desire[]." Fed. R. Civ. P. 23(c)(2)(B)(iv). The notice sent to class members in this case likewise notified them that they have the right to appear through counsel, for example, at the fairness hearing regarding the proposed settlement with Southern and Farrell. However, it is well-established that unnamed class members are not parties to a class action for most other purposes.
Federal Rule of Civil Procedure 24 governs intervention:
Fed. R. Civ. P. 24.
As part of its broad authority to control the progress of class actions certified under Rule 23, the court can also enter "orders that . . . impose conditions on the representative parties or on intervenors[.]" Fed. R. Civ. P. 23(d)(1)(C).
In the context of a class action for damages, the requirements of due process for notice to class members were described by the Supreme Court in
339 U.S. 306, 314-15 (1950) (citations omitted).
Federal Rule of Civil Procedure 23(c)(2)(B) effectuates these requirements in the context of class actions which are, like the instant action, certified under Rule 23(b)(3):
Fed. R. Civ. P. 23(c)(2)(B). In addition, Federal Rule of Civil Procedure 23(e) provides that as a condition of a proposed settlement in a class action, "[t]he court must direct notice in a reasonable manner to all class members who would be bound by the proposal. Fed. R. Civ. P. 23(e)(1).
While Rule 23 provides the general process to follow in providing notice to absent class members, it does not purport to detail every requirement necessary to satisfy due process.
With respect to the method of delivering notice to absent class members, neither due process nor the Federal Rules requires more than "notification . . . reasonably certain to inform those affected."
Before addressing the movants' objections to the adequacy of the notice, the following discussion takes up class plaintiffs' argument that the instant motions should be denied because the movants are not parties to this action. Subsequently, the court reaches the issues raised by the movants to the extent necessary to resolve the motions.
As an initial matter, it is appropriate to note the unusual posture and timing of the instant motions. The movants have not cited any case in which non-party class members, before the opt-out period has expired, have sought to object to the adequacy of notice. Clearly, while the movants claim not to have received the notice by direct mail, the notice plan was effective in reaching them to the extent they became aware of the notice during the opt out period and, with the benefit of counsel, had the opportunity to analyze the notice and the efficacy of its communication to class members prior to filing these motions.
Allowing Carrico to intervene in order to entertain her motions would be inappropriate. First, intervention of right is unavailable inasmuch as existing parties adequately represent the interest of movants who choose not to opt out. Movants are requesting an extension of the opt-out deadline and the issuance of a new notice addressing the perceived defects identified in their filings. Neither form of relief is necessary to avoid "impair[ing] or imped[ing] the movant's ability to protect [their] interest," because, even assuming that the current notice implicates that interest in the case of other members of the class who did not receive it or who were misled by the suggested defects, each movant had the opportunity to timely opt out to fully protect his or her interest. In addition, the court's certification of the class necessarily included the finding that class members and their counsel would "adequately protect the interests of the class." Fed. R. Civ. P. 23(a)(4). Movants have not suggested facts that would call this finding into question, as required to intervene as of right under Rule 24.
Second, while the movants have claims sharing common questions with those presented in this action as required by Rule 24(b)(1)(B), permissive intervention is simply unnecessary to protect their claims. Although the movants, as unnamed class members, are not parties to this action, the broad language of Rule 23(d) regarding the court's authority to enter orders in such an action, e.g., to "determine the course of proceedings", Fed. R. Civ. P. 23(d)(1)(A), and "deal with similar procedural matters" Fed. R. Civ. P. 23(d)(1)(E), suggests that there is no impediment to the court's entering an order adjudicating the instant motions. Addressing the adequacy of notice at this time will further the conduct of these proceedings, but the court's doing so should not be read to imply that non-parties have an unfettered right to be heard on motions as they please. Given the centrality of notice to the legitimacy of the class action, and the fact that movants have an undisputed interest in the action as unnamed class members, it would be unduly formalistic to refrain from addressing their concerns about the notice.
Having concluded that the objections to the adequacy of notice have been sufficiently raised, the court proceeds to evaluate the merits of those objections.
A large portion of the movants' argument is focused on their allegation that notice did not effectively reach class members. In their initial filings, this assertion was supported by movant Carrico's own purported survey of 63 individuals whom she calls class members, and by movant's expert, Todd B. Hilsee. Plaintiffs' response makes plain that Mr. Hilsee misunderstood the number of class members reached by the notice. Mr. Hilsee supposes that only 30% of the class would be reached by the 92,000 direct mailings sent as part of the notice plan.
Because the mailing addresses were determined based on the water company's customer records, the number of mailings (92,000) corresponds to the number of households or businesses that were included in the direct mail plan, not the number of individual class members. As the mailings were sent to every identifiable customer served by the water company during the relevant period, Mr. Hilsee's statement that only 30% of the class would be reached by those mailings is plainly implausible. The court is thus unpersuaded by his conclusions that the notice was insufficient to provide notice to class members and that the plan failed to provide individual notice to the class.
Perhaps recognizing this, movant Carrico attached additional exhibits to her reply memorandum to support her criticism of the reach of the notice.
Even putting these methodological concerns to one side, as noted by the court in
Movants' remaining objections to the form of notice criticize the use of a bulk rate and single sheet for the notice mailing. The movants cite no authority for the proposition that in sending direct mail notices, which are otherwise the gold standard for class notice, the use of bulk pricing creates a defect in the notice plan. The latter objection to the form of notice, alleging that the notice was not distinguishable from "junk mail," is factually inaccurate. The outer fold of the notice was clearly marked with language in a large font informing recipients that it contained an "important legal notice of pendency of class action and partial settlement in litigation arising out of the January, 2014, water contamination event." (
Turning to the movants' objections to the content of the notice, none of the issues raised implicate the notice's overall adequacy. Both movant Carrico and Mr. Hilsee base much of their evaluation of the notice's content on a checklist prepared by the Federal Judicial Center to assist judges in developing class action notice plans.
Movant Carrico's argument that the content of the notice was deficient is also undercut by the cases she cites in support of that contention, which are distinguishable in that they address much more serious notice defects than any said to be at issue here. The court in
While the movants point to additional information they would have found helpful and generally state that the notice was "confusing," none of the additions they propose are necessary to render the notice adequate. The test for whether a given item must be included in a class notice is whether that information is such that "a reasonable person would consider [it] to be material in making an informed, intelligent decision of whether to opt out or remain a member of the class and be bound by the final judgment."
Movant Carrico also argues the notice should have "advise[d] the absent class that the class member may have to file a different individual case in order to prove damages, may have to hire an additional attorney to file that case or may have to forego a trial by jury on their personal damage issue or may have to accept a settlement which they are not a part of." ECF No. 581 at 11. This speculative parade of horribles facing absent class members is completely inconsistent with the actual proceedings in this class action. While the court has bifurcated liability and damages determinations, it nowhere suggested that class members will not be entitled to recover damages in this action, through their own counsel or, potentially, through the representation of class counsel at further proceedings should a liability determination be reached in the fault-only phase. Rather than discussing all the potential procedural developments that may occur in the case, the initial notice needed only to alert the class members to an action affecting their rights and "sufficiently inform [them] of the terms of the proposed settlement and their available options."
Finally, many of the movants' arguments, while presented as critiques of the notice, in fact take issue with the court's certification of the class on the limited issue of liability. While a bifurcated process is necessarily more complex than a certification on all issues, the notice explained that "[i]f the verdict at the conclusion of the class trial is in favor of plaintiffs, the Court will determine the method and manner of additional proceedings to determine whether you may be entitled to damages and the nature and extent of any such damages." (ECF No. 514-1). The movants argue that the failure to more extensively discuss damages and the process to be used to determine recovery implicates the adequacy of the notice, was "misleading," and would make it difficult for absent class members to make an informed response to the notice. However, these arguments overlook the fact that "[c]ertifying a class to determine the defendant's liability, while leaving the class members to pursue their individual damages claims, is a common example of partial certification."
In short, the court finds no defect in the notice that would warrant the relief requested by movants. The basic requirements of Rule 23 and due process are intended to ensure that notices fairly and reasonably apprise class members of a pending action affecting their rights and their options with respect to that action, but those requirements should not transform the notice into "a long `brief' of the parties' positions, precise in every detail and slated in such fashion as to please every litigant."
The court concludes that movant Carrico may not intervene because she has not shown that class counsel are inadequately protecting the interests of the class, cannot show prejudice because she had notice of these proceedings and the opportunity to opt out during the opt-out period, and allowing intervention would cause undue delay. The court also concludes that the movants' objections to the adequacy of notice lack merit, and that the notice sent satisfied the requirements of due process and Rule 23. Accordingly, the court ORDERS that:
Inasmuch as the movants' filings, prior to the opt-out deadline, evidence their intent to opt out of the class, the court further ORDERS that the named movants may file, no later than ten days following the entry of this order, a latter opting out of the class consistent with the instructions in the class notice.
The Clerk is directed to forward copies of this written opinion and order to counsel of record and any unrepresented parties.