Articles & Publications
Read about recent developments in class action administration, best practices and insights from our seasoned
Possible Effects of Federal Unemployment Tax Credit Reductions in Class Action Settlement
The administration of labor and employment class action settlements often makes use of a Qualified Settlement Fund
(QSF) for the payment of settlement benefits, administration fees, and appropriate taxes. The calculations involved in
ning settlement benefits and taxes generally are conducted to exhaust all the funds for the QSF, making
However, “credit reductions” applied to several states
including such key states as California and New York
effectively raise the Fe
deral Unemployment Tax (FUTA) for wages paid, and could leave QSFs depleted of funds
even as additional taxes come due.
Employers pay federal and state unemployment insurance (UI) taxes on wages paid. The Internal Revenue Service
s a credit on a portion of the state UI taxes, lowering the effective FUTA tax rate.
When states deplete their unemployment fund insurance, as has been the case in many states in the recent years’
recession, they can draw funds from a federal trust fund as
loans. However, these loans must be repaid within two
years. Failure to repay these loans on a timely basis results in the loss of the FUTA tax credit. In other words, in
states which have not repaid their unemployment insurance loans, employers in effect
must pay a higher FUTA tax
rate on wages paid in those states in subsequent years.
Impact on Class Action Settlement Administration
When calculating class member awards and other distributions from the settlement fund, it is imperative the
onsider the impact of the FUTA credit reduction in certain states. The rates vary by state and can be
updated retroactively, so it is crucial the administrator stay up to date as changes occur.
Generally, employer taxes are paid either:
From the QSF (e.g.,
awards to claimants are reduced by the amount of the employer taxes); or
Outside the QSF (e.g., defendants fund the QSF plus any employer taxes that are due).
Whichever method of payment a settlement agreement uses, failure to address the FUTA credit redu
ction can have
Settlement funds are depleted by the time of the annual filing for FUTA taxes (Form 940).
The defendant must be asked to provide additional, unanticipated funds.
Claimants have been overpaid or underpaid based on the additi
onal tax due.
The state assesses the QSF more than a year after distribution for an additional FUTA tax interest
What You Can Do
The FUTA credit reduction issue is fluid, with different situations applicable in different states or for different
structured settlements. There are several methods of handling each potential pitfall to help mitigate the risk of owing
additional taxes once the funds within the QSF have been exhausted.
Contact us to discuss specific options for your settlements.
T CONSULTING, INC.
625 MARQUETTE AVENUE, SUITE 880
MINNEAPOLIS, MN 55402
Traditional and New Media in Class Action Notice
The State of Play
Alicia Gehring & Maureen Gorman
As the Internet is increasingly
used for communication, entertainment, news and information gathering, class action
attorneys frequently ask how the evolving media landscape is affecting our approach to notice: “Surely, the Internet is
all you need nowadays?” Well, not quite.
mers are integrating new media options into their life, they haven’t abandoned traditional media sources
and habits. In fact, as recent news events have demonstrated, consumers get their information from multiple sources,
turning their attention to differe
nt media types at different times and for varied reasons. For example, when Twitter
feeds rumored the death of Osama Bin Laden, consumers turned on their televisions to verify the rumors. The next
day, many picked up copies of daily newspapers to get the e
Because there are so many media options, more than one media type is usually required to reach a broad, mass
audience. Integrated media programs are more important than ever to reach the widest number of people. Even
Google, a domi
nant Internet brand, uses a traditional media approach to drive more traffic to their search engine by
running a newspaper ad campaign featuring “Google
day” puzzles. When planning media programs for class action
notice, we take the benefits and disadvan
tages of each media type into consideration, along with the demographics
and media habits of class members.
Here are important facts about traditional and new media that influence the design of class action notice programs:
Print media remains a dominant s
ource of information for many adults.
Half of all adults read a newspaper on most days.
Despite the circulation declines and business setbacks
that the newspaper industry has suffered in recent years, newspapers are still widely read. The typical
er reader is an adult 35 or older.
Younger adults are slow to adopt the daily newspaper reading
habits of their parents, but more than 30% of Adults 25
34 still read a Sunday newspaper each week
Magazines continue to have faithful followers who give und
ivided attention to their content.
adult reads about 11 magazine issues a month and on average, people spend 42 minutes with a magazine
Among all media
digital or analog
magazine readers are less likely to engage in another activity
Consumers spend more time with TV than with any other medium.
In fact, 47% of adult media usage is television
The average household has two or three sets, and over 80%
of consumers pay for added channel choices through cable or satellite ser
Nielsen surveys indicate
TV set usage totals eight hours a day per household.
Internet reach is very fractionated, posing hurdles to mass reach but allowing a range of delivery mechanisms.
More than 150 million adults in the U.S. go online each da
y, and view over 17 billion web pages.
spend an average of 42 seconds on a page online.
Despite enormous online usage, with over 300 million
the ability to accumulate mass reach with an exclusively online ad campaign is nearly
sible. In fact, because of the sheer volume of sites, most reach a relatively small number of
consumers. Building significant reach exclusively online can be exorbitant, if possible at all.
The advance of new devices to access the Internet provides customi
zed access but further fragments media
Mobile Internet access, via phones and laptops, is expected to overtake desktop computer
access in about five years.
Today, about 37% of mobile users access the Internet at least once a month
so the potential to reach mass audiences remains low. Even so, as mobile
phones advance to smart phones and laptops shrink to tablets, consumers will rapidly explore new
information channels. The development of each new device will create
another niche in media usage to be
Each form of media provides a different type of ad exposure with unique attributes.
Online notice advertising consists of text and banner ads
(also known as “display” advertising) containing
headlines about th
e case that allow users to click through to the case website to get more information. In
addition to display advertising, text ads may be used to help facilitate search engine users’ access to a case
website, through sponsored results.
Online, consumers op
en their browsers and a webpage unfolds on the computer screen with the page
images visible only to that visitor.
However, an ad placed in a magazine or newspaper offers the medium’s
full audience an opportunity to see the notice, and has a tangible shelf
life with multiple opportunities for
along readers. Online banners rotate among websites, and are therefore transient and cannot be
retrieved on a future visit. But they do offer instant access to case websites with a simple click of the mouse
be seen on a range of portable devices.
Television notice is intrusive with sound and visuals conveying important information in 30 seconds and
usually prompting immediate response.
Like online advertising, it is also transient. Certain demographic
can be reached cost
effectively through cable and broadcast, but mass reach through television can
Social media provides promising notice options, but has limitations.
Facebook can be an efficient online ad vehicle for certain demographics.
Among adults, Facebook’s
heaviest users are women 18
Facebook users love Facebook; they visit frequently and spend more
time with the Facebook site than with other web publishers.
Facebook has over twice as many page views
However, as w
ith many other online media options, achieving mass reach can be very
expensive on Facebook. For example, the cost to reach 40 million readers of Better Homes & Gardens is
approximately $165,000, but to reach 40 million unique users of Facebook would cost
In 2010, Twitter announced “promotional tweets” where companies could push out messages to promote
specials, new products or upcoming events.
However, this and other ad products are still in testing and not
open for use. Currently, a notice messa
ge using Twitter would involve the site’s standard 140
“Tweets.” In order for Tweets to generate word of mouth, a “Tweeter” has to already have followers. This is
akin to a press release aimed at generating media coverage, since the audience cann
ot be known in
advance, and the Tweet may generate no results at all.
scale consumer class actions have to take into account the media consumption of the entire class. A notice
plan must provide coverage of whatever the demographic segments are withi
n a class often including a variety of
ages, incomes, education levels, races and ethnicities. There are pronounced differences in media usage by different
demographic groups. Younger people are increasingly adopting new media and technologies, while older
continue to heavily use traditional media.
To adequately reach a mass consumer class, the optimal mix of media needs to strike a balance between cost
efficiency and reach effectiveness in determining the use of new and old media. For most nationa
l cases, the largest
percentage of reach will still come from traditional offline media. But as new media give birth to revolutionary
communication possibilities, KM will continue to look at answering old questions from different angles.
MRI Spring 2011. GfK MRI Studies are based on GfK MRI’s national Surveys of the American Consumer,
conducted since 1979, which survey people 18 years of age and older in the contiguous 48 states. GfK MRI conducts
more than 26,000 personal interviews with
consumers in two waves annually, each lasting six months and consisting
of 13,000 interviews. Data are released from the Spring and Fall surveys and rolled in the annual Doublebase Study.
The Doublebase Study consists of two full years of data drawn from o
ver 50,000 survey respondents. Consumer
information is recorded on 500 product/service categories, 6,000 brands, and various lifestyle activities. Respondents
are selected based on the ability to project their responses nationally. The survey results are s
Therefore, estimates of audience and/or demographics from these surveys are subject to sampling and non
error. The use of mathematical values from those surveys should not be regarded as a representation that they are
exact to the pre
cise mathematical value stated.
GfK MRI Fall 2010; The Association of Magazine Media, Magazine Handbook 2011/12, p. 6, available at
factbook/ (last visited June 22, 2011).
ee Magazine Handbook,
GfK MRI Media Day 2010.
GfK MRI Doublebase 2010.
The Nielsen Co.,
Average TV Viewing for 2008
09 TV Season at All
Time High, available at
(last visited July 5, 2011).
comScore Data: March
May 2011. comScore, In
c. is a source of Internet audience measurement for advertising
agencies, publishers, marketers, and financial analysts. comScore measures Internet usage and other activity
through monitoring software installed on the computers of a panel of approximately
2,000,000 people. Active in 170
countries, comScore tracks more than 3 million unique websites. Panel
based surveys are subject to minimum
reporting standards and not all surveyed websites will meet these standards.
April 2011 W
eb Server Survey, available at
(last visited July 5, 2011).
International Telecommunication Union (ITU),
ITU sees 5 billion mobile subscriptions globally in
(Feb. 15, 2010).
GfK MRI Spring 2011 Survey.
comScore Data: May 2011. Based on total minutes of use.
MRI Spring 2011.
Share on f
Share on twitter
Share on email
Share on print
More Sharing Services
Majority of Class Action Publication Notices Fail to Satisfy Rule 23 Requirements
Shannon R. Wheatman, Ph.D. and Terri R. LeClercq, Ph.D.
Reproduced with permission from The Review of
Litigation, Vol. 30, No. 1 (2011). Reproduced with
permission from Class Action Litigation Report, 12 CLASS 560, 06/24/2011. Copyright © 2011 by The Bureau
of National Affairs, Inc. (800
On December 1, 2003, Federal Rule of Civ
il Procedure 23 (Rule 23) was amended to require that class action notices
in federal court “clearly and concisely state in plain, easily understood language” the information that class members
need to make an informed decision.
In 2000, the Advisory Comm
ittee on Civil Rules of the Judicial Conference of
the United States had solicited assistance from the Federal Judicial Center (FJC), the research and education agency
of the federal judicial system, to draft model notices that would satisfy the plain lang
In this article, notice expert Dr. Shannon R. Wheatman and legal writing expert Dr. Terri R. LeClercq, who worked
with the FJC for a number of years to develop the model notices, explain the continuing problems with poorly worded
rly designed notices.
Wheatman and LeClercq report findings from a study of 511 class action notices that
were published after the plain language amendment took effect. The research uncovers many shortcomings and the
authors offer advice on improving the
design and content of class action notice.
I. What is Plain Language, and Why is it Necessary?
Notice has progressed in the years since the passage of the plain language amendment, but it still has a long way to
go to realize the Advisory Committee’s goals
that “notice be couched in plain, easily understood language” and that
practitioners “work unremittingly at the difficult task of communicating with class members.”
members cannot benefit from Rule 23 if practitioners are not held accounta
Plain language is clear and direct. It relies on principles of clarity, organization, layout, and design. Plain language
writers “let their audience concentrate on the message instead of being distracted by complicated language.”
communicates effectively with laypersons. This is critical because only 28% of U.S. adults have graduated from
In fact, a 2003 literacy study found that less than 15% of U.S. adults were proficient in “integrating,
synthesizing, and analyzing mu
ltiple pieces of information located in complex documents.”
Empirical research has shown that redrafting legal documents into plain language increases reader comprehension
and is more persuasive.
On the other hand, failure to write in plain language can have serious consequences
because if readers cannot understand the content of a document, they will stop reading.
In the class
context, that means due process will be thwarted and cl
ass members will remain uninformed of important rights they
are giving up.
II. Development of the Model Plain Language Notices
The FJC conducted research to determine the best way to write class action notices to allow laypersons to easily
understand all o
f their rights and options. The model plain language notices (“model notices”) include examples for
two settlement classes (including a securities settlement and a personal injury/product liability settlement) as well as
a model notice for an unrestricted
certification involving an employment case on a trial track. To aid judges and
practitioners, the FJC has posted the model notices at
The model notices were not created in a vacuum but were developed through
a thoughtful, multi
stage process that
culminated with an empirical study. The empirical study on the FJC’s securities notice proved that the plain language
versions of the model notices were exponentially more understandable than the typical legalistic no
tices that are still
The notice project involved real
world testing that included focus groups composed of laypersons of
average education. The first author of this report tested securities model notices on shareholders in investment clubs
across the country.
Most of the focus group participants displayed a very general knowledge of class action lawsuits.
At the same time,
most participants were relatively unfamiliar with class action notices.
Participants’ “preconceived notion[s] of a
notice [were] almost totally negative; they expected to find wordy legalese that would be difficult or impossible to
Most notices today continue to live down to this expectation.
III. Where Are We Now?
With the passage of the plain langua
ge amendment, the hope was that the world of class action notice would be
turned on its head and lawyers would take great strides to ensure that class members could finally understand all of
their rights and options.
The real question: how far has class ac
tion notice come in the past six years? Well, if you turn to the pages of many
major newspapers and periodicals, you will probably find a typical class action notice
that is, if you can see it. Many
notices continue to be written in small, fine print;
e notice often features the court’s official
looking case caption,
which does not provide any incentive for actual class members to read it.
If readers can get past the design features
that deter reading, they will likely be met with large blocks of ja
filled text that are unintelligible to many
IV. Current Study
To determine empirically whether class action notices are complying with the plain language requirement of Rule 23,
the authors reviewed 511 class action notices published bet
ween 2004 and 2009.
The sample included 176 notices
filed in state
court (representing 42 states) and 335 notices filed in federal court (representing 54 federal district courts).
sample included 477 settlement notices and 34 certification notices.
The lawsuits involved a variety of subject matters
including antitrust, banking and finance, consumer, employment, environmental, human rights, insurance,
pharmaceutical, privacy, securities, and telecommunications.
Both authors evaluated the content of e
They evaluated the notices on design attributes, content, and
overall readability. The layout or design of a notice includes the headline, font size, ad size, and the techniques used
to highlight important information. The content of the noti
ce includes information about the lawsuit, the class
definition, settlement details, attorneys’ fees, how to file a claim, how to be excluded, how to object, deadlines,
hearing date, and the binding effect of any settlement or judgment. Readability was bas
ed on whether the notice was
concise, avoided legalese, and was written in plain language.
The authors found significant differences in securities and non
securities notices and therefore present the overall
findings for each group separately.
A. Key Findi
Over 90% of securities notices used an uninformative case caption in the header of the notice.
Most notices did not include a noticeable and informative headline to capture the attention of potential class
Over 60% of notices were written in l
ess than an 8
The majority of notices failed to clearly inform class members of the binding effect of the settlement.
thirds of the notices with an opt
out right did not inform the class member that they could opt out of
Over 75% of the notices did not tell class members they had the right to appear through an attorney.
thirds of the notices failed to satisfy the concise, plain language requirement of Rule 23.
B. Notice Design
There is more to a no
tice than just words on a page. The design or layout of a notice influences readability. The FJC
study found that comprehension of class action notices could be significantly improved through deliberate changes in
“language, organizational structure, forma
tting, and presentation of the notice.”
The design of a notice will determine whether anyone will even attempt to read it. The notice must be designed using
friendly format that will entice class members to want to take time to review it. A well
designed notice will
incorporate readable fonts, a noticeable and informative headline, section headings, adequate white space, and
proper highlighting techniques such as using bold headlines and avoiding all capital letters (CAPs).
Figure 1 reveals that
a clear majority of class action notices in the study did not heed the sage advice of The Manual
for Complex Litigation, which recommends that an author take steps to get the attention of class members:
“Published notice should be designed to catch the att
ention of the class members to whom it applies. . . . Headlines
and formatting should draw the reader’s attention to key features of the notice.”
Figure 1: Percentage of sample publication notices using appropriate design features.
Advertising research has found that the eyes and consciousness of most readers never make it past the headline.
court’s formal case caption (inappropriately used in 38% of non
securities and 91% of securities notices) will never
provide an adequate hea
dline for a class action notice because it does not alert the reader to the subject matter. The
case caption is meaningless to any class member who is not a named party.
The size of the headline is also important. It is doubtful that attorneys would use a
tiny font size to advertise their law
firm. However, the majority of notices in the study (61% of non
securities and 74% of securities notices) had a
headline or heading a few point sizes smaller than the text in this article. Fifty
nine percent of notices
used the same
size font for the headline and the body of the notice. The headline needs to stand out from the body of the text and
should be in a much larger font in order to catch the attention of potential class members. A recent study found that
read font is more likely to get people to act because it is more appealing, easier to handle, and more
A carefully crafted headline should be noticeable and should quickly persuade readers that they have a stake in the
class action and th
at they will be able to understand it.
is an example of an attention
getting headline from the
securities model notice.
The large, noticeable font will ca
pture the attention of potential class members, and the benefit focus of the headline
will motivate them to read the notice.
D. Organization, Internal Cues, and White Space
Information is well
organized if it is easy for readers to navigate. Writers can ac
complish this by using appropriate
headings and sub
headings. The notice should tell the story of the litigation. Unnecessarily long sentences and
lengthy paragraphs in many of the sample notices became even more cumbersome because many notices failed to
ncorporate section headings (41% of non
securities and 88% of securities notices). Section headings should serve
as guideposts to the information in each section and improve readability by breaking up large blocks of text.
In addition, a large majority o
f sample notices (84% of non
securities and 97% of securities notices) included wall
wall words with little to no white space around the paragraphs and headings. Focus groups in the FJC study found
that density off
One notice in the study was
the size of four postage stamps. There is absolutely no way
something that small can attract the attention of potential class members, let alone provide the information required
by Rule 23.
E. Appropriate Highlighting Techniques
Furthermore, the model not
ices show that appropriate highlighting of key information (e.g., bolding important
deadlines) also breaks up the text and lets readers know what is important. Appropriate highlighting of important
information appeared in one out of ten securities notices
and about one
third of non
securities notices. Another
common design flaw is the use of all capital letters in long strings of text. Some writers may innocently believe this is
a good way to provide a class definition or to give warnings. However, PEOPLE R
ECOGNIZE WORDS BASED ON
THEIR SHAPE, NOT THE ACTUAL LETTERS IN THE WORDS.
ALL CAPS ARE HARD TO READ, CAUSING THE
READER TO STRUGGLE TO MAKE OUT THE WORDS. Many of the notices in the study used too many CAPs (the
average numbers of words in CAPs was 28 in
securities and 41 in securities notices). One notice had 391 words
in CAPs, which made a very short notice quite difficult to read. Writers should stay away from all CAPs and instead
use bold, italics, or both to make important information stand out.
However, in order not to overwhelm readers, writers
should use this highlighting in moderation.
F. Content of the Notice
Rule 23 requires that specific content be written in plain language.
The notice must clearly describe (1) the nature of
the case, cla
ims, issues or defenses, (2) the class definition, (3) certain rights and options available to class members
(such as appearing in court, objecting to the settlement, or opting out of the class), and (4) the binding nature of any
judgment on anyone who rem
ains in the class.
Rule 23 also recommends that class members be notified of an
attorney fee motion by class counsel, and be given an opportunity to object to it.
The Manual for Complex Litigation
also recommends that the notice should include deadline
s for taking action,
describe essential terms of the settlement (including information that will allow class members to calculate their
benefit), indicate the
time and place of the fairness hearing, and prominently display how to get more information.
Figure 2: Percentage of sample publication notices containing important information.
Figure 2 shows that some notices provide so few details that it is unlikely class members would recognize that they
might benefit from reading it; it is also unlikely that
those class members would learn enough from the information to
decide what to do. Most securities notices failed to tell class members details about the lawsuit, the terms of the
settlement, or how much attorneys stand to make from the settlement. Non
urities notices were better on most
counts, but the number of notices that did not clearly tell class members what they needed to know was still high. The
most astounding finding was that 10% of non
securities notices and 20% of securities notices did not
definition of the class.
Figure 3 provides even more troubling findings. The basic rights afforded class members under Rule 23 are often
omitted from publication notices. The most common omission was notice of the right to appear, which was absen
77% of non
securities notices and 90% of securities notices. Many notices did not inform class members that they
had the right to object to a settlement (33% of non
securities and 40% of securities notices) or that they could opt out
of the litigation
or settlement (25% of non
securities and 31% of securities notices). Most problematic was that 40% of
nonsecurities notices and 10% of securities notices did not even tell class members the all
important detail that they
would be bound by any court order
if they remained in the class. The term “bound” will be foreign to most laypersons.
Of those notices that informed class members they would be bound, only a handful (31% of non
securities and 14%
of securities notices) properly educated class members, in e
asily understood language, as to what “bound” really
meant. The FJC model notices explain what this really means: “If you don‘t want to be legally bound by the
settlement, you must exclude yourself by
Month 00, 0000,
or you won‘t be able to sue, or continu
e to sue, XYZ about
the legal claims in this case.”
Percentage of sample publication notices containing important rights and deadlines.
“The purpose of [readability] is to close the gap between the reading level of the [notice]
and the reading ability of
Figures 4 and 5 show that many notices in the study failed to close that gap. Overall, only 14% of
in federal court were concise and written in plain language. In contrast, although only four of
the 50 states require
plain language in their class actions statutes,
the state court class action notices in the study were easier to
understand than the federal class action notices, with 28% satisfying the concise, plain language requirement.
e 4: Percentage of sample publication notices written in plain and/or concise language in federal and state class
Further analysis revealed that the securities cases in the study were causing the great disparity between federal and
state court not
ices. Specifically, in non
securities cases, 27% of federal class action notices and 31% of state class
action notices were clear and concise. In contrast, only 2% of the 170 notices filed in federal securities cases
provided class members with a clear, co
ncise recitation of their rights. These findings, albeit not very surprising, seem
to provide one explanation of why billions of dollars are left unclaimed in securities cases.
Percentage of sample publication notices in securities and non
curities cases that are written in plain
and/or concise language.
Plain language is produced by reducing or eliminating writing that frustrates even the most motivated readers: legal
jargon, unfamiliar or abstract words, negatively modified sentences, word
s with double meanings, verbs as nouns,
misplaced phrases, and prepositional phrases.
The active voice and personal pronouns aid comprehension.
Eliminating extraneous information and keeping sentences and paragraphs short helps notices fulfill the conc
requirement and increases comprehension in the process.
It is important for practitioners to keep in mind that a
notice needs only to meet the content requirements of Rule 23; it is not necessary to include every detail from the
class action compla
int or settlement agreement. Two legal commentators understood this concept quite well when
they remarked that “[m]uch of what lawyers write . . . including many class action notices, is incomprehensible to
average citizens. The lawyerly concern for comple
teness and accuracy may conflict with the objective of
Many practitioners may believe that it is not necessary to meet the requirements of Rule 23 in a publication notice
because that information can be found in a more detailed notice.
The authors disagree, but nonetheless reviewed 50
long form notices (16 securities, 34 non
securities) that were filed in 2008 and 2009. These long form notices suffered
from the same defects as the publication notices. Many lacked a readable headline, few
clearly informed class
members about their rights, and most would be unintelligible to the average layperson. The majority of long form
notices were as poorly written as the publication notices
only 18% satisfied the concise, plain language requirement
6% of non
securities notices and none of the securities notices).
A few details from the FJC study are important to note here. Some securities practitioners may mistakenly believe
that a simple notice is not necessary for an educated class. The study on th
e FJC’s securities notices found that even
shareholders were less likely to understand a legalistic class action notice than a plain language notice.
To read a
dense, legalistic notice, a reader must not only be educated, but also possess the time and mo
tivation required to
wade through a sea of legal jargon. The FJC study found that even the most intelligent readers will pass over a notice
in small print and stop reading when they encounter unfamiliar legalese.
V. Keeping it Readable
legal content should not be burdensome reading to their intended audience. Writers should assume
that class action notices will be read by a vast array of consumers who shop, buy, work, and live their lives without
needing to know
court names and case numb
ers. When writers choose their words, they need to focus on common equivalents of
legal jargon. Most readers will stop reading “a claim for declaratory relief ” before they learn that “relief ” was indeed
their goal. If a legal or
technical term is necessa
ry, it needs to be defined: “exclusion means… .”
Plain language is more than merely simple words; embedded in the term is sentence length, subject/verb order,
unambiguous modifiers, and even the active voice. Rule 23 is not asking authors to use baby talk,
but it does insist
that the notice be stated in “plain, easily understood language.”
If sentences average more than fifteen words, the
legal content may confuse some intended readers. If interrupting clauses separate verbs from their subjects, the legal
content may puzzle many readers. If a sentence is a mishmash of floating modifiers that do not logically fit next to
their antecedents, most readers will be perplexed. The passive voice is also a problem: “The service contract has
been claimed to be unlaw
ful . . . class members will be bound by the determination . . . .” Who is claiming? Who is
binding them? No one can unravel and reconstruct those vague sentences comfortably. Readers who are
uncomfortable will stop reading, and the purpose of providing no
tice has been frustrated. Without plain language, the
notice is moot. Courts should not approve notices that fail to meet Rule 23’s plain language requirement.
A notice needs to be clear and succinct, so an average reader can go through it once and underst
and its general
message. Few readers will take the time to re
read, again and again, a legal notice that appears inside their
newspaper or magazine. Potential class members should be caught up by the headline and mention of the product;
they should be able
to grasp the point of the notice at first glance. If not, writers of the notice have disregarded the
purpose of the notice
to inform class members about the rights and options they have in the case.
No one can affect class action notice as
effectively as the judges who review them. Judges must be the standard
bearers and stringently enforce Rule 23’s requirements. Attorneys and judges can use the FJC model notices as a
template or outline, which will allow them to see that it is possible to
get all of the necessary information into a
noticeable, succinct, plain language format. Satisfying Rule 23 will protect the interests of the class; only then can
due process be served. To assist judges and practitioners, the authors have developed a notic
e checklist, attached
as Appendix A.
VII. Appendix A
Noticeable headline (stands out from the body of the text)
Informative headline (who should read it and why)
Adequate white space
Appropriate highlighting of impor
tant information (e.g., bold deadlines)
Avoids all CAPs
Logical sequence of content.
headings to break up text
Lists that simplify complex information
Information about lawsuit
Information on nature of case, claims, issues or defenses
Terms of settlement
Rights and Options
Right/How to opt
Right/How to object
Right to appear
How to file a claim
Binding effect of judgment
Dates and Deadlines
Opt out deadline
Getting More Information
Short sentences (average length less than 15
No extraneous information (case caption, names of attorneys, etc.)
Can read through once, and a layman will un
derstand rights and options
Written for the layperson
Uses words that are common to your target audience
Uses personal pronouns
Avoids legal jargon and defines technical terms
Uses consistent words throughout to refer to the same thing
mainly active voice
Uses logically structured sentences (subject
Avoids double negatives
Avoids misplaced phrases and prepositional phrases and prepositional phrases
* Shannon R. Wheatman, Ph.D. is a Vice President with Kinsella Media, LLC. Dr. Wheatman has been involved in
more than 125 class actions and has been recognized as a notice expert in state and federal courts across the U.S.
and in Canada. Dr. Wheatman prev
iously worked in the Research Division of the Federal Judicial Center. Her
doctoral dissertation was on plain language drafting of class action notice and her master’s thesis was on
comprehension of jury instructions. Dr. Wheatman’s Ph.D. is in social psyc
hology from the University of Georgia; she
also holds a master’s in legal studies from the University of Nebraska
Terri LeClercq, Ph.D., was the plain
language consultant for the Class
Action Model Notices produced by the Federal
She taught Advanced Legal Writing at the School of Law, University of Texas, for 28 years. Before
that, she taught college rhetoric and composition for more than 15 years. She is the author of Expert Legal Writing
(University of Texas Press, 2000), Guide
to Legal Writing Style (Aspen, 5th. ed., 2011), and almost 100 articles on
FED. R. CIV. P. 23(c)(2)(B).
More information on the research that was done by the FJC on the model notice project can be found at
The team working on the model notices included the authors, Todd Hilsee, Tom Willging, and Bob Niemic.
FED. R. CIV. P. 23 advisory committee's note.
Short Definition of Plain Language,
(last visited Oct. 4, 2010).
SARAH R. CRISSEY, U.S. CENSUS BUREAU, EDUCATIONAL ATTAINMENT IN THE UNITED STATES: 2007, 2
(Jan. 2009), availab
MARK KUTNER ET AL., NATIONAL CENTER FOR EDUCATIONAL STATISTICS, LITERACY IN EVERYDAY
LIFE: RESULTS FROM THE 2003 NATIONAL ASSESSM
ENT OF ADULT LITERACY 4, 13 (Apr. 2007),
(finding 13% of adults demonstrated ability to perform these skills).
swering the Critics of Plain Language,
5 SCRIBES J. LEGAL WRITING 51, 62
(1996) (listing a number of studies conducted on plain language and concluding that plain language is more
persuasive and comprehensible to readers than standard legal writing)
Robert Charrow & Veda
Making Legal Language Understandable: A Psycholinguistic Study of Jury Instructions,
79 COLUM. L.
REV. 1306 (1979) (arguing that systematic rewriting of jury instructions can measurably increase reader
ension); Veda Charrow,
Readability vs. Comprehensibility: A Case Study in Improving a Real Document,
LINGUISTIC COMPLEXITY AND TEXT COMPREHENSION: READABILITY ISSUES RECONSIDERED 85 (Alice
Davison & Georgia M. Green eds., 1988) (rewriting automobile rec
all letters for readability increases comprehension
among study sample); Michael Masson & Mary Ann Waldron,
Comprehension of Legal Contracts by Non
Effectiveness of Plain Language Redrafting,
8 APPLIED COGNITIVE PSYCHOL. 67 (1994) (reporting enhan
comprehension of legal documents after three stages of simplification).
WILLIAM H. DUBAY, THE PRINCIPLES OF READABILITY 1 (Aug. 25, 2004),
(“When texts exceed the reading ability of readers,
they usually stop reading.”).
Shannon R. Wheatman, The Effects of Plain Language Drafting on Layperson‘s Comprehension of Class
Action Notices 21, 55 (Sept. 25, 2001) (unpublished Ph.D. dissertation, University of Georgia) (on file with author)
(revealing poor overall comprehension of
a sample of class action notices by laypersons
between 45% to 65%).
This empirical study also found that comprehension for the rewritten securities plain language notice was over 90%.
(listing findings that comprehension of plain language notices rang
ed from 15.99 to 16.17 out of a possible score
at 35 (explaining the FJC securities notices study involved 229 volunteer participants who were members of 27
Detailed Discussion of Methodology,
FED. JUD. CENTER,
(last visited Sept. 24, 2010).
The notices were published in
The Austin American S
tatesman, Better Homes & Gardens, Cosmopolitan, The
Detroit News, Financial Times, Jet, National Geographic, Newsweek, The North Penn Reporter, Oakland Tribune,
Parade, People, The Philadelphia Inquirer, Reader’s Digest, Spirit Flight, Sports Illustrated,
The Sunday Voice, TV
Guide, USA Today, USA Weekend, The Wall Street Journal,
The Wall Street Journal Sunday.
Half of the notices were filed in California (19%), New York (16%), Illinois (8%) and New Jersey (7%).
The percentage of agreement
between the two authors was high at 92%. The average score was used when there
Detailed Discussion of Methodology, supra
FEDERAL JUDICIAL CENTER, MANUAL FOR COMPLEX LITIGATION (FOURTH) § 21.31 (2004),
KENNETH ROMAN & JANE MAAS, HOW TO ADVERTISE, 110 (1st ed. 1976) (“[M]ost readers never reach
the text or body copy”).
Hyunjin Song &
If it’s Easy to Read, it’s Easy to do, Pretty, Good, and True,
PSYCHOLOGIST, 108, 108 (2010) (suggesting that font type leads readers to predict ease or difficulty of reading,
informing their decision to act).
JoAnn Syverson &
Informative Headings Improve Readability,
U. MINN. CENTER FOR WRITING
(Apr. 11, 2003),
See Detailed Discussion of Methodology, supra
note 12 (“Even small changes in format and presentation . . .
appeared to increase a reader’s motivation to read and understand the notice.”).
The Science o
f Word Recognition: or How I Learned to Stop Worrying and Love the Bauma,
MICROSOFT CORP. (July 2004),
FED. R. CIV. P. 23(c)(2)(B) (“The notice must clearly and concisely state in plain, easily understood
Nissan Motor Corp. Antitrust Litig., 552 F.2d 1088, 1104
05 (5th Cir. 1977) (“Surely ‘the best notice
the circumstances cannot stop with . . . generalities. It must also contain an adequate description of
the proceedings written in objective, neutral terms, that . . . may be understood by the average absentee class
member.” (quoting Robinson v. Union Carbi
de Corp., 544 F.2d 1258, 1263
65 (5th Cir. 1977))).
FED. R. CIV. P. 23(h)(1)
(2). The Advisory Committee notes that the 2003 amendments state that “it would be
important to require the filing of at least the initial motion in time for inclusion of info
rmation about the motion in the
notice to the class about the proposed settlement that is required by Rule 23(e).” FED. R. CIV. P. 23 advisory
FEDERAL JUDICIAL CENTER, MANUAL FOR COMPLEX LITIGATION (FOURTH) § 21.312 (2004),
IMPACT INFORMATION, WORKING WITH PLAIN LANGUAGE 29 (2008), available at
(last visited October 1, 2010).
See generally AMERICAN BAR ASSOCIATION, SURVEY OF STATE CLASS ACTION LAW 2009 (Dennis K.
Egan et al. eds., 2009),
(subscription required) (examining each state class action rule
and finding only Arkansas, Minnesota, New
Jersey, and Texas have adopted Rule 23‘s requirement for plain language).
A Billion Here, A Billion There: Solving the Historical Data Problem and Recouping More in
CS GROUP, 2,
(last visited Sept. 19, 2010)
(“[A]ccording to a series of a
cademic studies conducted over the last decade, as well as anecdotal evidence from
market participants, anywhere from 30%
70% of investors that are eligible to participate in a given settlement fail to
file a claim form . . . .”).
KINSELLA MEDIA, LLC &
RUST CONSULTING, INC., PLAIN LANGUAGE PRIMER FOR CLASS ACTION
NOTICE 1, 11
12, available at
visited Sept. 19, 2010).
Arthur R. Miller & David Crump,
Jurisdiction and Choice of Law in Multistate Class Actions After
Co. v. Shutts, 96 YALE L.J. 1, 22 (1986).
note 10, at
55 (reporting higher overall comprehension for a plain language notice versus a
at 44 (finding that only 2% of shareholder participants would read a legalistic notice carefully whereas 57%
reported they would carefully read
a plain language notice).
FED. R. CIV. P. 23(c)(2)(B).
Class Notice and Claims Administration
Katherine Kinsella and Shannon Wheatman
Much has been written and discussed about the negative aspects of the American class action model.
US class action device is far from perfect, and other countries are taking steps to avoid the abusive aspects of class
actions in their construction of statutes to govern collective actions. There is, however, an important aspect of the US
el that is clearly worth consideration. Over the past 70
plus years, federal and most state laws have evolved
safeguards to protect the due process rights of class members. Due process rights are fundamentally at issue in US
class actions when notice is r
equired to inform class members about class certification and/or settlement and when a
judgment has awarded class
The emergence of a global economy now requires US courts to face the dilemma of securing the due process rights
of class members
around the world.
In US class action law, which has been carefully crafted to protect the rights of
class members, notification plays a prominent role. Although additional international concerns with class actions may
remain, the notice provisions requir
ed by Rule 23 of the Federal Rules of Civil Procedure
could provide a model for
the development of notice standards in other countries.
In 1938, Rule 23 was included in the new Federal Rules of Civil Procedure. The role of notice in class actions was
nded in 1966 when Rule 23 was modified to include the ‘best notice practicable’ standard. Class action notice
provisions advanced even further in 2003 when Rule 23 was amended to require plain language.
Rule 23 requires
close judicial scrutiny over the en
tire class action process including an explicit standard (‘fair, reasonable, and
adequate’) for approving a settlement.
In addition, when class actions settle in federal court, the Class Action
Fairness Act (CAFA), enacted by Congress in 2005, is intended
to further enhance the due process protection for
class members by allowing scrutiny of class action settlements by federal and state attorneys general or regulatory
Notifying class members about a lawsuit and giving them an opportunity to b
e heard is meant to solve many
problems inherent in class actions. Beginning with the landmark ruling by the US Supreme Court in
Central Hanover & Trust Company,
US class action jurisprudence has repeatedly confirmed that notice plays a
role in due process:
an elementary and fundamental requirement of due process in any proceeding which is to be accorded fi nality is
notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action
afford them an opportunity to present their objection.
It has been said that notice helps to ‘democratize’ the class action procedure.
Notice provides the mechanism for
class members to act. Every class member has an equal right to participate in the cl
ass action but those rights and
how to act on them can only be given through proper notifi cation. Notice in Rule 23(b)(1) and (b)(2) classes, where
money damages are not involved, does not include a right to exclude oneself (opt
out) and is given at the
discretion when appropriate under the circumstances of the case. However, notice is mandatory in Rule 23(b)(3)
classes where money damages are involved.
In situations where the litigation is moving towards trial the notice
typically is disseminat
ed at least 30 days before the start of the trial. If the litigation is being settled the notice will be
disseminated shortly after the court grants preliminary approval to the settlement.
This chapter provides an overview of the notification requirements
under Rule 23 and offers insights into how courts
and practitioners should evaluate a notice program to ensure that it adequately reaches class members with
information that is easily digested and acted upon. The authors explain how a notice program is des
executed. The chapter concludes with a discussion about administering a class action.
Individual notice is sent directly to the class member via first class mail (in the form of a letter or postcard) or
electronic mail. The US S
upreme Court, in Eisen v. Jacquelin, made clear that individual notice must be provided to
all class members who are identifiable through reasonable efforts, regardless of the cost.
‘[W]hat is “the best notice
practicable under the circumstances” and wha
t constitutes “reasonable effort” is a determination of fact to be made in
the individual litigation.’
The individual notice concept continued to evolve in
Jones v. Flowers,
in which the US
Supreme Court held that due process dictates that reasonable ste
ps be taken to deal with undelivered mail.
In referencing the notice requirements of Rule 23, the court in
In re Nissan Motor Corporation Antitrust Litigation
stated, ‘The United States Supreme Court has declared that subdivision (c)(2) expresses an “una
requirement” that “individual notice must be provided to those class members who are identifiable through reasonable
The Court in
went on to explain ‘[o]bviously, the word “reasonable” cannot be ignored. In every case,
eness is a function of anticipated results, costs, and amount involved.’
Generally, the cost of providing
notice to a class that is certified for trial falls upon the plaintiffs.
However, the court can order that the defendant
bear some of the costs of
identifying potential class members.
When a class action is being certified for settlement
purposes only, typically the defendants will either separately pay for the costs of notice or the money will be deducted
from the settlement fund.
Paid media noti
The key question in any notice program is what constitutes ‘the best notice practicable’? When comprehensive
mailing lists of class members exist, direct mail (by post or email) should be the primary method used for notification.
When comprehensive mail
ing lists are unavailable or cannot be compiled through reasonable effort then ‘notice by
publication will suffice under Rule 23(c)(2) and under the due process clause.’
In Re Domestic Air Transportation
the court held, ‘[i]f clas
s members . . . cannot be identified, there is no other requirement of
mandatory individual notice, and the Court must exercise its discretion to provide the best notice practicable under
The overarching goal of any notice program is
to eff ectively reach the class so that class members have a
‘meaningful’ opportunity to be heard.
Rule 23 can ‘comport with constitutional standards of due process only if there
is a maximum opportunity of notice to the absentee class members . . . .’
Each class action requires a notice
program tailored to the specifics of the case. Factors such as the distribution or consumption of a product or service,
the number of readily identifiable class members, the anticipated class size, the demographics of c
lass members, and
the geographic location of class members influence the direction and scope of a notice program.
Both direct and indirect purchasers form distinct classes in many antitrust cases. Direct purchasers, which are often
businesses that may have
registered agents authorized to receive notice, are usually ‘readily identifiable’ and can be
reached through direct mailed notice. The names and addresses of indirect purchasers, who are typically consumers
of a particular product or service, whether an
individual or entity, are not usually known. While there are many ways
to communicate information, paid media is usually the basic component of a notice plan intended to reach
unidentifiable class members. It is targetable to specific demographic groups, m
easured by accredited marketing
research firms for audience reach and frequency of exposure, and contractually guaranteed to appear on a certain
In selecting media vehicles for notice, it is important to rely on an expert in analyzing demographics an
d media usage
skills that attorneys are not trained in and usually do not have
to help guide the selection. An expert can help
ensure that the notice program has the optimal media or mixture of media that is necessary to strike an adequate
een cost efficiency and reach effectiveness. Cost efficiency is critical in any large media campaign. Of
course, the overall cost of class notice depends on the size and geographic location of class members. However, a
national notice program relying entir
on paid media in the US is costly and frequently runs to over a million dollars.
Identifying a target demographic and selecting media
Demographics of class members guide the selection of media in a class action notice program. Individuals within the
neral population consume media differently based on income, gender, age, education, and other factors. Notice
programs therefore must establish a clear demographic target or targets in order to select media to reach a specific
audience. How a product or se
rvice was used or how a product exposure occurred, by or to whom, where and over
what period of time, provides critical information in identifying the demographic characteristics and geographic
distribution of class members. This research establishes the p
arameters for identifying and locating class members
and shapes the notice program.
In the US as well as many other countries throughout the world, accredited media and marketing research firms
provide syndicated data on audience size, composition, and oth
er factors pertaining to major media, including
broadcast, print, and outdoor advertising. They provide a single source measurement of major media, products,
services, and in
depth consumer demographic and lifestyle or psychographic characteristics. These
companies regularly survey consumers nationally through in
person interviews and questionnaires.
There are literally hundreds of information sources throughout the world combining the measurement of media with
product usage. In the US, the leadi
ng survey company for single
source measure is GfK MRI (MRI).
company, GfK Group, is conducting similar cross
media research in eight countries throughout Europe along with
print and other media surveys in at least ten more. Target Group I
ndex (TGI) is a global network of single
market research surveys in over 60 other countries on six continents.
Additionally, the Nielsen Company conducts
audience or marketing research in over 100 countries and is one of the leading providers of
in television and the Internet worldwide.
Whether one is using television in the UK, magazines in Germany,
newspaper in Japan, or the Internet in Australia, there is an accredited media company providing research on
Demographic profiles of individuals who use a specific service or product can be constructed from these surveys. For
example, the data allow notice and media experts to identify the demographics of consumers who are cell
users, homeowners, cigare
tte smokers, insurance policyholders, or prescription drug purchasers. In many instances,
product usage by brand or type is available.
In addition, the media habits of these product users or demographic targets can be further evaluated. It can be
d if they are light newspaper readers, heavy television viewers, moderate Internet users, and so forth. A
media expert can compare different types of media for audience penetration and cost. For example, TV penetration of
a particular target audience can b
e compared to that of radio, magazines, and newspapers. In addition, the data is
indexed by media vehicle
a specific television show, radio program, or magazine
with respect to its penetration of
the target audience. This information provides direction
to the media selections and ensures that the media used
actually reaches the target audience.
For example, in the class action
In Re International Air Transportation Surcharge Antitrust Litigation,
involved international travelers who had traveled on British Airways or Virgin Atlantic, which included people living
predominantly in the US and the UK.
Kinsella Media consulted several research sources in order to determine the
vehicles to carry the notice. The TGI survey of the UK provided the demographic characteristics and the
media usage of the class members there as well as the readership of UK publications. ComScore, an international
provider of digital marketing data, pro
vided rankings and audiences for websites visited by class members.
audience data revealed which media vehicles provided the most efficient means of reaching class members (in this
case newspapers and travel websites), as well as how many insertions
were necessary to adequately reach a
substantial number of them.
There are a number of ways to measure media penetration. Two of the most basic are reach and frequency. Reach is
the estimated percentage of a target audience
reached through a specific media vehicle or combination of media
vehicles. Frequency is the estimated average number of times an audience is exposed to an advertising vehicle
carrying the message. Reach and frequency calculations are estimates within a sta
ndard margin of error that provide
the advertiser with a reliable basis upon which to judge penetration of target audiences by media.
Software programs created by the media industry allow media planners to calculate reach and frequency estimates.
al formulas factor out duplication of readership or viewership among the target audience and allow calculation
of reach and frequency as well as other media measurements. This allows determination of the net audience reach of
a media schedule using various
kinds of print, online, and broadcast media.
Reach and frequency targets depend upon a number of factors that guide how extensive a paid media program
should be within the context of what is reasonable and practicable. Among the factors are the type of re
(injunctive relief or damages, whether direct or cy pres/fl uid recovery), the seriousness of the tort, the size of the
settlement, and the percentage of the class to be reached through media versus direct mail.
Determining the adequacy of noti
Rule 23 and the relevant case law do not defi ne what constitutes adequate notice. However, the guarantee of due
process that is inherent in the Fifth and Fourteenth
Amendments of the US Constitution provides valuable information on the minimum notice r
The Fifth Circuit
has explained, ‘The essence of due process is that “deprivation of life, liberty or property by adjudication be preceded
by notice and opportunity for hearing appropriate to the nature of the case.”’
The Seventh Circuit has a
process requires notice reasonably calculated to provide actual notice of the proceeding and a meaningful
opportunity to be heard.’
To demonstrate to a court that a notice program satisfies due process, the program should provide certain objec
and quantifiable elements, for example, the size of the class and the percentage of class members reached through
direct notice. In particular, a notice program directed to unidentified class members should: (1) identify the
demographics of class memb
ers and establish a target audience, (2) outline the methodology for selecting the media
and other plan elements and how they relate to product usage or exposure, and (3) provide results that quantify for
the court the adequacy of the notice based upon rec
ognized tools of media measurement.
In cases where there is a measurable demographic target available through survey data and the reach and frequency
can be accurately measured, the notice expert should use these estimates to demonstrate to the court what
percentage of a target audience was reached and how many opportunities class members had to see the notice. In
situations where a measurable target demographic is not available because of limitations on survey data, the notice
expert must demonstrate to th
e court the rationale for selecting the media and why it is effective in reaching class
members. A demographic analysis can provide reasonable guidance to a notice expert in determining what media is
best to reach the class. For example, in a class compose
d of highly educated people, without any other discerning
demographic characteristics, such an analysis might show that newspapers would likely be the best choice.
In the international class action
In re Holocaust Victims Assets Litigation,
it was not poss
ible to measure media
against Jewish or Roma (Gypsy) people, two principal target audiences.
However, the team of notice administrators
constructed a multi
faceted program that included paid media in Jewish publications and in countries where there
Jewish concentrations, worldwide press outreach in 40 countries that contained target audiences, outreach
through Jewish social service networks and religious organizations, as well as in
person outreach to
Roma people through field coordinat
ors and social service organizations. Reports from the administrators
meticulously chronicled all aspects of the notice program, quantifying efforts and results that demonstrated its
Content and design of notice
‘It is in the government’s
interest that class members meaningfully understand their rights and make knowing,
intelligent and voluntary choices.’
The 2003 plain language amendment to Rule 23 grew out of a desire to ensure
that class members were fully informed of their rights.
uring the rule
making process the US judicial branch’s
Advisory Committee on the Federal Rules of Civil Procedure asked the Federal Judicial Center (FJC) to conduct
research and develop illustrative plain language notices.
The Advisory Committee notes a
ccompanying the revised
rules discuss the importance of plain language:
The direction that class
certification notice be couched in plain, easily understood language is a reminder of the need
to work unremittingly at the diffi cult task of communicating w
ith class members. It is difficult to provide information
about most class actions that is both accurate and easily understood by class members who are not themselves
lawyers. Factual uncertainty, legal complexity, and the complication of class
cedure raise the barriers
According to the FJC, the first impression of any notice must ‘persuade the readers that they have a stake in the
class action and that they will be able to comprehend the notice.’
The notice must clearly describe all of
and options available to class members (such as filing a claim, appearing in court, objecting to the settlement, or
opting out of the class
) as well as the binding nature of any judgment on anyone who fails to opt out of the class.
also requires that class members be notified of an attorney fee motion by class counsel and be given an
opportunity to object to it.
This transparency of attorneys’ fees is also recommended by
The Manual for Complex
a reference guide
for judges and practitioners.
Class Action Fairness Act
In 2005, CAFA imposed new notice requirements and increased judicial scrutiny of coupon settlements (which
usually give class members a coupon for future services or products with the defendant’s co
mpany) and attorneys’
In federal court, CAFA requires defendants to give notice of a proposed class action settlement to certain state
and federal government officials. Attorneys general and regulatory agencies now have a chance to comment on class
action settlements providing yet another opportunity to safeguard the rights of class members. CAFA provides very
detailed and comprehensive requirements for notice to regulating authorities, which must be undertaken within ten
days of filing a proposed s
ettlement. The governing court is prohibited from approving the settlement before 90 days
after this notice has been given.
Administering a class action
Any class action settlement requires the terms of the settlement to be carried out: disseminating class
notice via mail,
email, or other means to class members; answering class members’ questions via phone, email, website, or
correspondence; receiving and processing claims, with whatever specific parameters each settlement requires;
calculating awards; dist
ributing settlement benefits; and reporting to the parties. The parties can retain a settlement
administrator to manage some or all of these processes, as well as to offer consultative expertise. Notice experts also
may be retained by the parties to work c
losely with the settlement administrator to ensure that the court
notice program is properly implemented.
While hired by one or more of the parties to the lawsuit, the settlement
administrator generally works according to the terms of the settl
ement agreement, accepting only the joint direction of
the parties in resolving matters not made clear by the settlement agreement. At one or more key points in the
administration of the settlement, the settlement administrator typically provides a detaile
d summary of its actions to
the court and the parties in the form of one or more affidavits or declarations. Such reporting is most often submitted
prior to the hearing at which the court determines whether to grant the class action final approval, but may
done after each phase of administration or as a final accounting.
The basic methods of administering a class action settlement with a substantial international contingent do not vary
significantly from settlements with primarily US
However, such an administration requires the parties
and administrator to consider up
front some key components to provide the class with clear and easily
understandable information and to minimize the risk of objections
in short, to ensure the settlem
ent is given its best
chance at court approval.
Most obvious of the issues to be addressed when dealing with a class containing foreign claimants is offering notice,
claim forms, and other information (via printed, online, and recorded means as well as liv
e customer service) in
various languages, all while containing costs as much as is practicable.
Typically, an administrator works with the parties to format the approved notice so it can be mailed or emailed to a list
of known class members
. When administering settlements with large numbers of foreign claimants, the parties or
administrator must arrange for the translation of materials into the necessary additional languages. In most cases,
more than just the notice itself must be translated
: claim forms, website copy, and telephone scripts must also be
considered for translation. Sufficient time and a contract with a reputable firm that is capable of translating legal
material are paramount, and in
country native translators are preferred.
A critical issue is the existence of terms such
as ‘class action,’ which are not part of the language in certain countries, either as specific words or as legal concepts.
This can cause confusion among class members unless carefully explained. In such case
s, a glossary should be
prepared and agreed to for all terms to be used in class member communications for clarity as well as for
Authors Guild, Inc. v. Google Inc.,
a worldwide consumer class action, notice was published in 216
ountries in 72 languages, with direct notice and a settlement website with online claim features in 36 languages.
Ensuring the consistency and accuracy of all materials in multiple languages, across multiple forms of media
including communication with in
country organizations assisting with notice requires adherence to a translation
Perhaps less obvious but of utmost importance in notification and ongoing settlement administration is data
management, which includes strict adherenc
e to privacy laws. An administrator often receives class member data
(such as name, address, and other information relevant to the settlement). Crossing national borders necessitates
knowledge of and adherence to a multitude of data privacy laws. The Europ
ean Union and its member countries as
well as other nations around the world have unique requirements for the treatment of personal information, which
may differ from US law.
The parties and an administrator of a settlement whose sphere intersects with dif
fering privacy laws must consider
strategies to avoid violating any privacy law. Partnership with firms located in each relevant country can be an
effective strategy in dealing with privacy issues. In the administration of the Google settlement, hundreds o
organizations, publisher associations and author groups worldwide were contacted to ask for assistance with giving
direct notice to the class which obviated the need for the release of any personal information to the administrator.
ing with class members
Increasing use of the Internet benefits international administration. While accommodations should be made for
printed materials and customer service in multiple languages, settlement websites can incorporate translated
accommodate class members’ needs at their convenience, regardless of time zones, toll
telephone numbers, or delays allowed for international mail service. Approximately 30 times as many class members
fi led claims online as filed through traditional
paper claims in the aforementioned Google settlement.
A typical settlement website includes a summary of the case information including the terms of the settlement,
answers to frequently asked questions, links to settlement documents such as the long
orm notice, claim form, and
settlement agreement, and, increasingly, the functionality to submit questions or claim forms online. By utilizing these
features, many of the cost
prohibitive and time
consuming aspects of settlement administration are bypass
Despite this increasingly online experience, an administrator must continue to work with more traditional methods of
free telephone support is complicated when dealing with class members in different countries: a
established for the US cannot receive calls from most foreign nations, necessitating multiple
numbers to cover all affected countries (each possibly with different instructions, such as dialing codes or geographic
limitations). There are certain exceptions
to this rule, however, such as ‘freephone’ numbers that will work across
numerous European and other countries.
Once callers dial the administrator’s office, Interactive Voice Response (IVR)
that is, pre
recorded messaging set
up in a series of menus
allows for cost
effective administration in any language. Because many callers’ questions
or needs are satisfied through this automated messaging, the need for live operators in many languages is greatly
reduced or eliminated. Voicemail can be utilized i
n those less
commonly requested languages to allow fluent
operators to make callbacks rather than sit available for extended periods of time awaiting calls.
The administrator also facilitates the processing of claims. Settlement structur
es and funds vary greatly, so this
process can be as simple as logging receipt of a claim or as complex as reviewing claim information such as receipts,
proof of ownership documents, or financial transaction records. Similarly, benefi ts may be pre
(i.e., $5 per claimant) or require complex calculations based on pre
existing and/or class member
Once the settlement has received final approval and the calculation of awards is completed, an administrator
the settlement benefi ts to eligible class members. Most often, benefits are remunerated in the form of
checks, but can take the forms of coupons, vouchers, or even products, depending on the settlement. The distribution
phase of administration includes b
oth the printing and mailing of checks and follow
up processing including handling
of undelivered checks, re
mailing of checks to better addresses, reissuing checks when necessary, and distribution
account management. Typically, this process lasts 180 day
s, at which point any remaining, unused or unclaimed
funds are handled in accordance with the settlement agreement or the parties’
Notice ‘provides the structural assurance of fairness that permits representative parties to bi
nd absent class
The ‘assurance of fairness’ can only be achieved if the class is adequately reached with a notice that is
easy to understand and act upon. The ability to act upon the notice requires proper administration of the class action.
ministrators have the important task of ensuring that the voice of class members is heard by answering class
member inquiries and processing claims, objections, and opt
The ongoing international dialogue regarding how to move forward with aggregate
litigation has already played out in
the US. Those experiences have had an impact on other countries’ development of aggregate litigation laws and
procedures, which can be seen most prominently in Canada.
Many other countries are on the brink of where th
was back in 1965, the year before the opt
in procedure was replaced with the current opt
out procedure. The
structural dynamics of US class action law, particularly as they apply to notice and due process, are quite sound and
worthy of consideration
. Developing mechanisms to ensure proper notifi cation of class members will allow countries
to harness the legal virtues of class actions and contain many of its vices.
In the US, a specialized service industry came into existence in order to effectively
implement the class action rule. It
required the generation of expert services that could identify and locate class members, give them fair notice, and
administer their claims. It is likely that other jurisdictions contemplating class action reform would h
ave to generate
similar institutions to help service this process.
Katherine Kinsella is the President and Shannon Wheatman, Ph.D. is a Vice President of Kinsella Media. They are
leading, nationally and internationally recognized experts in the
design, preparation, and dissemination of legal notice
in class actions and bankruptcies.
For a response to these negative critiques, see Chapter 1 of this
The authors have worked on numerous class actions that included foreign claimants,
for example: Authors Guild,
Inc. v. Google Inc. No. 05
8136 (S.D.N.Y. 2009); In re Int’l Air Transp.
Surcharge Antitrust Litig., No. 06
1793 (N. D. Cal. 2008); In re TJX Cos. Retail Sec. Breach Litig., No. 07
Mass. 2008); In re Parmalat Sec.
Litig., No. 04
1653 (S.D.N.Y. 2007); In re Royal Ahold Sec. & ERISA Litig., No. 03
1539 (D. Md. 2006); Galanti v. The Goodyear Tire & Rubber Co., No. 03
0209 (D.N.J. 2004); In re Western Union
Money Transfer Litig., No. 01
0335 (E.D.N.Y. 2003); In re Ho
locaust Victim Assets Litig., No. 96
1999); Ahearn v. Fiberboard Corp., No. 93
0526 (E.D. Tex. 1994); and Continental Casualty Co. v. Rudd, No. 94
0458 (E.D. Tex. 1994). [Citation reflects the year the notice program was implemented.]
Fed. R. Civ. P. 23(c)(2).
Fed. R. Civ. P. 23(e).
The Class Action Fairness Act of 2005, §§1712
Mullane v. Cent. Hanover Bank & Trust Co., 339 US 306, 315 (1950).
See Benjamin K. Kaplan,
Continuing Work of the Civil Comm
ittee: 1966 Amendment of the Federal Rule of Civil
81 Harv. L. Rev. 356, 392 (1967).
Rule 23(b)(1) is utilized to avoid prejudices that would result in inconsistent adjudication if individual actions were
allowed, 23(b)(2) is used when
plaintiff s are seeking declaratory or injunctive relief, and 23(b)(3) is suitable when a
class action is superior to other available methods and common questions predominate over individual ones. Herbert
B. Newberg & Alba Conte, 2 Newberg on Class Actions
§4:1 (4th ed., West 2002).
Eisen v. Jacquelin, 417 US 156, 173 (1974).
‘Agent Orange’ Prod. Liab. Litig., 100 F.R.D. 718, 729 (E.D.N.Y. 1983) (internal citations omitted).
Jones v. Flowers, 547 US 220, 225 (2006).
tor Corp. Antitrust Litig., 552 F.2d 1088, 1097 (5th Cir. 1977) (internal citations omitted).