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All’s Not Well(er) in Pennsylvania: Court Sanctions Defendant For Contact With Putative Class Members

There is nothing inherently wrong with outreach to putative members of an uncertified class—whether by the named plaintiff’s counsel or by the defendant’s counsel.  As the ABA has recognized, “[b]oth plaintiffs’ counsel and defense counsel have legitimate need to reach out to potential class members regarding … information that may be relevant to whether or not a class should be certified.”  ABA Formal Op. 07-445 (2007); see also Austen v. Catterton Partners V, LP, 831 F. Supp. 2d 559, 567 (D. Conn. 2011) (“Both parties need to be able to communicate with putative class members … from the earliest stages of class litigation.”).  Thus, as the Supreme Court has unanimously held, restrictions on pre-certification communication with putative class members must be justified by a “clear record and specific findings” of actual “abuses.”  Gulf Oil v. Bernard, 452 U.S. 89, 101-04 (1981).  And even then, any limitations must be “carefully drawn … [to] limit[] speech as little as possible.”  Id.

So this author was surprised to read that, earlier this week, a magistrate judge in the Eastern District of Pennsylvania sanctioned the defendant in a putative class action for the mere act of communicating with putative class members.  See Weller v. Dollar General Corp., No. 17-2292, 2019 U.S. Dist. LEXIS 34325 (E.D. Pa. Mar. 4, 2019).  In Weller, the defendant’s counsel “interviewed” 16 members of the putative class “and obtained declarations from some of them to support [the defendant’s] opposition” to a class certification motion.  Id. at *3.  There was no suggestion, let alone a “specific finding,” that defense counsel had said or done anything misleading or coercive during the interviews. Nevertheless, the court deemed these communications “improper” and ordered the defendant to bankroll the plaintiffs’ depositions of the 16 individuals who were contacted.

The court rested its holding on the Pennsylvania Rules of Professional Conduct, which (like all jurisdictions’ rules) provide that a lawyer “shall not communicate about the subject of the representation with a party the lawyer knows to be represented by another lawyer in the matter.”  Id. at *4 (emphasis added).  Of course, this rule only applies if unnamed members of an uncertified class are (1) “parties” to the litigation and (2) “represented” by the named plaintiff’s counsel.   The court held that this inquiry was governed by Pennsylvania state law, because the underlying causes of action were Pennsylvania state-law claims.  Citing a single Pennsylvania state-court decision—from a trial court, no less—Weller concluded that “under Pennsylvania [state] law putative class members are parties to the action until the court declines to certify the action.”  Id. at *4 (citing Braun v. Wal-Mart Stores, Inc., 60 Pa. D. & C. 4th 13 (Com. Pleas Phila. Cnty. 2003)).

This reading of Pennsylvania procedural law could be questioned.  But even if it is correct, Weller erred by looking to state law to determine who is a “party” to a case in federal court.  Under the Erie doctrine, who has “party” status is a procedural question, not a substantive one—and, as such, federal courts must decide it as a matter of federal law, even where state law provides the underlying cause of action.  See Rosenbaum v. Freight, Lime & Sand Hauling, Inc., 2012 U.S. Dist. LEXIS 145691, at *7-8 (N.D. Ind. Oct. 10, 2012) (defendant erred by “citing to Indiana state court cases” because “interpreting who is a ‘party’” in federal court is a “procedural” question).

As a federal matter, it is clear that “[a] nonnamed class member is not a party to the class action before the class is certified.”  Standard Fire Ins. Co. v. Knowles, 568 U.S. 588, 593 (2013) (emphasis in original) (quoting Smith v. Bayer Corp., 564 U.S. 299, 313 (2011)); see also Smith, 564 U.S. at 313 (rejecting as “novel and surely erroneous” the argument that an “unnamed member of a proposed but uncertified class … qualifies as a party” (quoting Devlin v. Scardeletti, 536 U.S. 1, 16 n.1 (2002) (Scalia, J., dissenting)). It is equally clear in the federal courts that, “[b]efore certification, the lawyers for the proposed class do not have an attorney-client relationship with the putative class members.”  In re Aftermarket Filters, 2010 U.S. Dist. LEXIS 105108 (N.D. Ill. Oct. 1, 2010), at *13 (citing ABA Formal Ethics Op. 07-445).[1] That is why, in Standard Fire—a putative class action asserting state-law claims—the Supreme Court held that a pre-certification stipulation by the named plaintiff’s counsel does not bind the class.  568 U.S. at 592-93 (before class certification, named plaintiff’s counsel “does not speak for those he purports to represent”).

The defendant in Weller correctly relied on Gulf Oil, where, as stated above, the Supreme Court held that “order[s] limiting communications between parties and potential class members” must be justified by a “clear record and specific findings” of “abuses.”  452 U.S. at 101-02.  But the court brushed Gulf Oil aside, noting that its facts concerned communications by the named plaintiff’s counsel, not by “defense counsel.”  Weller, 2019 U.S. Dist. LEXIS 34325, at *6-7.  That is true, but the holding of Gulf Oil was phrased in a party-neutral manner, and as other courts have recognized, “nothing in [Gulf Oil]’s reasoning … so much as suggests that [its] principles … extend only to restrictions on a plaintiff’s communications.”  Austen, 831 F. Supp. 3d at 567. After all, both sides have legitimate reasons to contact putative class members, and both sides may potentially engage in “abusive tactics.”  Id.; see also EEOC v. Mitsubishi Motor Mfg. of Am., 102 F.3d 869, 870 (7th Cir. 1996) (citing Gulf Oil for proposition that “each side” has the “right” to communicate with putative class members); Manual for Complex Litigation (Fourth) § 21.12 at 248-49 (2004) (citing Gulf Oil for proposition that “Defendants and their counsel generally may communicate with potential class members”).  Weller also pointed to a footnote in Gulf Oil stating that “the rules of ethics properly impose restraints on some forms of expression.”  2019 U.S. Dist. LEXIS 34325, at *7 (citing Gulf Oil, 452 U.S. at 104 n. 21).  Of course they do.  But it unclear how this generic statement supports Weller’s conclusion, since the applicable “rules of ethics” do not prohibit contact with non-represented non-parties in the first place.

Finally, hanging over all of this is the First Amendment.  The defendant in Weller apparently did not raise it, and the court did not consider it.  But, as Gulf Oil noted in dicta, a ban on communications with putative class members constitutes a “serious restraint[] on expression” that would likely trigger searching First Amendment scrutiny.  452 U.S. at 104; see also In re Sch. Asbestos Litig., 842 F.2d 671, 680 (3d Cir. 1988) (“Orders regulating communications between litigants … pose a grave threat to First Amendment freedom of speech.”).  It is doubtful, to say the least, that a flat ban on pre-certification contact between defendants and putative class members is a reasonably tailored means of advancing an important state interest.  As the ABA has noted, the mere “theoretical potential for abuse by defense counsel does not justify limiting a channel of communication that is vital to efficient and fair class litigation.”  ABA Formal Op. 07-445 (2007) (citing Vincent R. Johnson, The Ethics of Communicating with Putative Class Members, 17 Rev. Litig. 497 (1998)).

In sum, the Weller court made a mistake by sanctioning defense counsel for the mere act of pre-certification contact with putative class members.  Those persons are not “parties,” and are not “represented” by the named plaintiff’s counsel, just because they fall within the definition of a putative class that the named plaintiff’s counsel unilaterally inserted into a complaint.  As such, both plaintiffs and defendants should be permitted to contact them for legitimate reasons, including informal discovery in aid of class certification motion practice.  And by the same token, both plaintiffs and defendants should be prohibited from misleading, coercing, or taking undue advantage of them.  Weller’s one-sided rule, which treats putative class members as involuntary “clients” of the named plaintiff’s attorney from the outset of litigation, is not just unsupported—it is unfair.