eNotice is the Future, Part III - New Rule 23 Amendments

Have you read Parts I & II yet of our three-part enotice series?

Consider, babies in strollers play games on digital tablets is taken for granted. Video conferences with participants a half a world away you while walking down the street. We can post messages on Facebook and Twitter instantly reaching thousands of ‘friends.’ Anyone can instant or text message scores or hundreds of people with the touch of a button. Targeted advertising arrives in our computers, phones and other devices based on data Google and Facebook obtains from our internet searches. How does the computer know I love chocolate pudding? Eighty-four (84%) percent of American adults use the internet. Seventy (70%) use email.   Indeed, Facebook has over 1.3 billion daily active users every day!  

Hard copy communication, newspapers, postal mail, are a rapidly declining phenomenon. Newspaper circulation has declined almost fifty (50%) percent since 2000. Postal mail has declined forty-five (45%) over the same period. Picking up the newspaper or going to get the mail no longer has urgency.  

As we are almost finished with twenty (20%) percent of the 21st century, law is finally modernizing, catching up to accept new communication technological realities. But courts are institutional systems that are usually averse to rapid change.  

New FRCP 23 Changes Will Spur Courts Slow to Change  

Judicial neophobia of technology, the fear of something new, slows rapid change in class action notice decision making. Heck, we are all loath to software updates and new hardware. We have to learn this new stuff? The existing system seems to work just fine.  Judges, who have since law school been hammered regarding the notice requirements of Mullane v, Central Hanover --- “reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.” For more about the Mullane Doctrine click the link eNotice is the Future – Part I The Past - No Federal Rules to Internet Only Notice. 

But past, well-established concepts of ‘reasonably calculated’ notice become antiquated definitions considering the communication technology explosion. In December 2018, Federal Rules of Civil Procedure 23 was finally amended to finally appreciate this drastically changing hi-tech communications by creating a new standard of “United States mail, electronic means, or other appropriate means” (emphasis added)  … meaning expensive U.S. mail that is more commonly ignored in modern households is statutorily no longer the preferred method of notice.   

From the  Rule 23 Advisory Committee

Because there is no reason to expect that technological change will cease, when selecting a method or methods of giving notice courts should consider the capacity and limits of current technology, including class members’ likely access to such technology.  

Rule 23(c)(2)(B) is amended to take account of these changes. The rule continues to call for giving class members “the best notice that is practicable.” It does not specify any particular means as preferred. Although it may sometimes be true that electronic methods of notice, for example email, are the most promising, it is important to keep in mind that a significant portion of class members in certain cases may have limited or no access to email or the Internet.? 

Counsel should consider which method or methods of giving notice will be most effective; simply assuming that the “traditional” methods are best may disregard contemporary communication realities. 

So obviously, the next question is …. What is ‘most effective’ notice for the type of class action case?  

Best Usage of ‘Electronic Means’ (eNotice) 

The Federal Rules of Civil Procedure has finally placed ‘electronic means’ on an equal footing with the U.S. mail and ‘other appropriate means.’ But, of course, the Mullane ‘reasonably calculated, under the circumstances …’ etc. standard still applies and hence electronic means have greater abilities to provide class action members notice in some cases, but little affect in others. In the usual case the parties must possess email addresses, Facebook or Twitter accounts, or cell phone numbers (for SMS messages) of these members so directed notice can be provided. Hence, if the lawsuit involves transactions via eBay, Pay Pal, Linkedin, Netflix, Amazon or cell phone carriers electronic notice can be most effective. But a consumer action about soda pop has no automatic electronic handle. No one logs into the internet to buy a bottle of soda. Migrant laborers are less prone to use email, and those employers tend not to collect email addresses to contact their workers.  

And ‘electronic means’, which we are calling ‘eNotice’, can take on many variants – email, text messages, banner and pop-up advertising, Facebook and Google ads, dedicated web sites, etc.  

Email - Obviously, an internet-based class action, such as subscribers to Netflix or Major League Baseball television, can easily identify all possible class members. By definition, an email account is necessary to even consume the product or service. And the defendant possesses all the contact information necessary. An excellent example is In re Linkedin User Privacy Litigation (N.D. California) involving a massive password leak involving 800,000 members. The settlement was for $1,250,000. The cost of sending settlement notices via first-class mail would have eaten up most of the settlement. The federal district court permitted Linkedin to send notices via email twice that linked to the class action settlement website. Over 95% of the emails were successfully sent. About 100,000 visits were recorded, and over 47,000 claims presented. While only six (6%) percent of the class received a payout, the final settlement was approved by the court.  

Text messages - 97% of Americans owning a cell phone use text messaging on at least a weekly basis. However, text messaging is rarely requested or ordered for notice in class action cases. Sometimes courts are concerned with ‘privacy invasions’, concerns about ‘spam’ messages, or feel that text messages will just be ignored, despite that it is accepted among the technological community that emails are more susceptible to spam than texts messages.  

However, other cases easily lend themselves to text message class action notice. The Northern District of Illinois in In re AT&T Mobility Wireless Data Services Sales Tax authorized text message notice to over 32 million (yes million) class members. That’s a lot of postage saved that can then find its way to into class members pockets. Generally, though courts continue to demonstrate a reluctance to use text messaging at this stage of our technological and legal development.  

Dedicated Class Action Websites - They are now the norm. Courts almost universally accept and often require, that class action administrators create dedicated websites for putative class action members to not only file claims, but also include key legal documents, such as notices of key hearing dates, motions for class certification, opt-out procedures, and settlement documents. Click here for more information.  

Additionally, there are various web sites generally notifying the public of pending settlements and claims periods of certified class actions. Any of these sites may be awaiting pending claims that you, the reader, might be able to immediately take advantage. Lastly, the court may also order that notice appear on the defendant’s website, as potential class claimants are apt to visit.  

Banner and Pop-up Advertising - Simpluris maintains a team of internet advertising buyers to effective ‘market’ pending class action settlements. Indeed, courts can deny final settlement approval if the response rate to the settlement notice program does not meet the judge’s expectations or desires. These marketing professionals, using class demographics, target class action notices to specifics audience. Hence, a defective fishing rod class action would target pages often visited by fishing enthusiasts. Refunds for airline passengers on web travel sites, and so on.  

Most pop up and display ads are tracked through third parties such as Google Ads. How many clicks does the ad receive, how did the user find the website, how long did the user interact, where is the user, are all part of our marketing experts' investigatory arsenal to effectuate an effective notice plan.  

Keyword Marketing - Our marketing experts also can place ‘keyword search’ advertisements that are then ‘tagged’ to the settlement website. A putative class member typing those keywords will suddenly find an advertisement at or near the top of their search engine page. And the effectiveness of this marketing program can be verified daily based upon the numbers of clicks registered in Google Analytics. Many factors are involved, such as the privacy policy of each website, does the user provide information voluntarily, how they have signed into their browser, and what the ads are set up to track.  

Effective keyword marketing will always raise response rates.  

The Future – More Technological Change is Coming!  

Artificial intelligence. Machine learning. Using metadata to search transaction records, search queries, social networking interactions. ‘Supervised learning’ - live humans label data and algorithms detect correlations and patterns linking various pieces of information; Ouch, there is more. ‘Semi-Supervised – Learning’ -  using known tools, such as location, employment, education and using that information to locate others with similar data; and ‘unsupervised learning’ –  involving finding cluster dependencies correlations of data without much human involvement. Not yet household words, but these machine learning techniques aid technological might more effectively, and economically, provide notice ‘reasonably calculated, under all the circumstances’ as required long ago under Mullane. The Supreme Court in the 1950s had no idea that ‘all the circumstances’ would have such a different meaning. Heck, back then television was the new craze.  

Have an eNotice experience in court? Simpluris wants to hear about it. Please contact us at info@simpluris.com.