Opinion
Case No. C02-2101L
March 12, 2003
ORDER REGARDING COMMUNICATIONS WITH POTENTIAL CLASS MEMBERS
This matter comes before the Court on "Plaintiffs' Motion Regarding Defendants' Communication with Potential Class Members." Beginning shortly after it began receiving complaints from its customers, defendant Holland America Line, N.V., sent letters to individuals who had been ill during their cruise, offering a 25% gift certificate for use on a future cruise and/or cash in exchange for a release waiving all claims arising from the illness. Decl. of Tiffany Bergman (filed 1/27/03), Ex. A. Follow-up letters have been sent in recent months which mention that a release is necessary because of "pending lawsuits." Decl. of John P. Mele (filed 1/10/03), Ex. A. Plaintiffs seek an order precluding defendants from "(1) directly communicating with potential class members without first providing counsel for Plaintiffs with 5 days written notice of the precise nature of any intended communications and the opportunity to participate in any communications, and (2) indirectly communicating with potential class members regarding any aspect of this action without first providing counsel for Plaintiffs and the Court with 30 business days written notice of the precise nature of any intended indirect communications." Motion at 1-2.
Having reviewed the memoranda, declarations, and exhibits submitted by the parties, the Court finds that the record presented does not justify imposing restrictions on defendants' attempts to repair customer relations and settle existing disputes out-of-court. Viewed in a certain light, any settlement contacts between defendants and potential class members could be considered a threat to the Rule 23 procedures because such contact is designed to reduce the size of the class and the range of potential liability, thereby diminishing the effectiveness of class-wide litigation. See Kleiner v. First Nat'l Bank of Atlanta, 751 F.2d 1193, 1202 (11th Cir. 1985). Nevertheless, the Supreme Court has made it very clear that, although a district court has the power to limit communications that would undermine the purposes of Rule 23, such orders "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." Gulf Oil Co. v. Bernard, 452 U.S. 89, 101 (1981). In determining whether a party should be precluded from communicating with potential class members, courts consider, among other things, the likelihood of coercion, the content and nature of the communications, the parties' First Amendment interests, and the court's power to invalidate involuntary waivers or to otherwise remedy abuses.
In the case before the Court, there is no evidence of coercion or any reason to believe that a potentially coercive situation exists. Defendants sell vacation packages and have no other relationship with, or leverage over, the potential class members. Nor is there any indication that defendants are providing "false or misleading information" in their settlement offers. MANUAL FOR COMPLEX LITIGATION (THIRD) § 30.24 at 233 (1995). Plaintiffs argue that the cryptic reference to "pending litigation" does not adequately inform potential class members that this particular litigation is pending and may generate benefits that could not be obtained through settlement. The information is not misleading, however, and leaves the ultimate decision regarding the resolution of existing disputes to the recipient. If anything, the reference to litigation places the recipients on notice of at least one other option to settlement: whether he or she chooses to investigate that option or opts for a quick settlement is entirely up to the recipient. Requiring that defendants seek prior approval of plaintiffs and the Court before "directly" or "indirectly" communicating with potential class members is not required to protect the class action process and would unnecessarily impose on defendants' right to engage in commercial speech with its customers. Finally, although the law of the case has not been established, most jurisdictions permit the Court to set aside a release that was obtained through misrepresentation, fraud, or overreaching. With such safeguards in place and in light of defendants' conduct to date, a prior restraint is not appropriate.
For all of the foregoing reasons, plaintiffs' motion to restrict defendants' contacts with potential class members is DENIED.