WALNEY v. SWEPI LP et al

Filing 132

MEMORANDUM OPINION re 114 Joint MOTION (CONTESTED) FOR APPROVAL OF PLAN OF CLASS ACTION NOTICE filed by THOMAS J. WALNEY, RODNEY A. BEDOW, SR, 117 Second MOTION to Amend/Correct Order on Motion to Certify Class, filed by THOMAS J. WALNEY, RODNEY A. BEDOW, SR., 127 MOTION to Expedite Entry of Orders filed by THOMAS J. WALNEY, RODNEY A. BEDOW, SR.: The parties' Joint Contested Motion for Approval of Plan of Class Action Notice will be granted with directions that the partie s incorporate modifications to the class notice forms and class order as set forth in this opinion. Plaintiffs' Second Motion to Amend Class Definition will be granted, and plaintiffs' Motion to Expedite Entry of Orders will be denied as moot. An appropriate order will be entered. Signed by Chief Judge Joy Flowers Conti on 01/23/2017. (kas)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
THOMAS J. WALNEY and
RODNEY A. BEDOW, SR.,
individually and on behalf of all
others similarly situated,
Plaintiffs,
v.
SWEPI LP and SHELL ENERGY
HOLDING GP, LLC,
Defendants.

)
)
)
)
)
)
)
)
)
)
)
)

CIVIL ACTION No. 13-102 Erie

OPINION
Presently pending before the court in the above-captioned matter are the following
motions: (a) the parties’ Joint Contested Motion for Approval of Plan of Class Action Notice
(ECF No. 114); (b) the Second Motion to Amend Class Definition (ECF No. 117) filed by
plaintiffs Thomas J. Walney and Rodney A. Bedow, Sr. (“plaintiffs”); and (c) plaintiffs’ Motion
to Expedite Entry of Orders (ECF No. 127). For the reasons that follow, the parties’ Joint
Contested Motion for Approval of Plan of Class Action Notice will be granted with directions
that the parties incorporate modifications to the class notice forms and class order as set forth in
this opinion, plaintiffs’ Second Motion to Amend Class Definition will be granted, and plaintiffs’
Motion to Expedite Entry of Orders will be denied as moot.
I.

Plaintiffs’ Second Motion to Amend Class Definition (ECF No. 117)
On September 14, 2015, this court entered a memorandum opinion and order certifying

this case as a Rule 23(b)(3) class action with respect to Counts I and I(A) of the Second
Amended Complaint. In doing so, the court defined the class to include:

1

Every person who on or after March 14, 2009, signed a Pennsylvania oil and gas
lease (labeled “PA Paid Up Lease Rev. 06.09.2011”) and/or memorandum thereof
in favor of and recorded by SWEPI, LP and received, in exchange therefore, a
draft instrument in the amount of the corresponding lease bonus, which draft was
neither paid nor replaced by a subsequently issued draft or check relating to the
same (or substantially the same) property.
Notwithstanding the foregoing, there shall be excluded from the Class any person
electing in writing to be excluded from the Class.
(Mem. Op. dated Sept. 14, 2015 at 49, ECF No. 90.) Plaintiffs subsequently filed a motion to
amend the class definition (ECF No. 93), which was denied on May 13, 2016 (ECF No. 111).
On June 7, 2016, plaintiffs filed their Second Motion to Amend Class Definition (ECF
No. 117). The motion was based on class counsel’s discovery that another lease form, i.e., “PA
Paid Up Lease Rev. 05.01.2011” (hereafter, “Lease Form 05.01.2011”), had been utilized by
SWEPI LP (“SWEPI”) and Shell Energy Holding GP, LLC (“Shell” and, together with SWEPI,
“defendants”) during the time frame relevant to this lawsuit. Plaintiffs sought to amend the
current class definition to include these additional leaseholders. They suggested that the
amendment could easily be accomplished by simply inserting a reference to Lease Form
05.01.2011 into the current class definition.
After defendants filed their response to the motion and related materials (ECF Nos. 121,
122), the court held a motion hearing on August 11, 2016. As reflected in the transcript of that
hearing (ECF No. 131), the court indicated its willingness to amend the class definition in
accordance with plaintiffs’ suggestion. The court noted, however, that it would add an exception
to exclude from the class “any lessor who has filed a separate lawsuit.” (See Tr. of 8/11/16 Mot.
Hrg. at 9, ECF No. 131.) The intent of the court was to exclude those landowners who had
previously obtained a favorable Rule 56 judgment in the case of Masciantonio v. Swepi LP, Civil
Action No. 4:13-cv-797, 2016 WL 3856122 (M.D. Pa. July 15, 2016). The court left it to the
parties to craft a proposed order that effectuate the intended amendment. (Hrg. Tr. at 10.)
2

Having been unable to reach an agreement on the appropriate language, the parties
submitted their respective proposals. Plaintiffs suggest the following (with proposed changes in
the class definition underlined):
Every person who on or after March 14, 2009, signed a Pennsylvania oil and gas
lease (labeled “PA Paid Up Lease Rev. 06.09.2011” or “PA Paid Up Lease Rev.
[05.01.2011]”)[1] and/or memorandum thereof in favor of and recorded by
SWEPI, LP and received, in exchange therefore, a draft instrument in the amount
of the corresponding lease bonus, which draft was neither paid nor replaced by a
subsequently issued draft or check relating to the same (or substantially the same)
property.
Exclusions. Notwithstanding the foregoing, there shall be excluded from the
Class any Person electing in writing or email to be excluded from the Class, and
any Person whose individual claim for payment of the lease bonus has been
sustained or denied by a verdict or dispositive order of a court in a separate
lawsuit, irrespective of the outcome of any appeal.
(See ECF No. 127-2.) In proposing this language, plaintiffs insist that the key distinction for
exclusion from the class, consistent with Masciantonio, should not be whether a separate lawsuit
is filed, but whether the individual claim has been adjudicated. They maintain that their
proposed language is necessary in order to protect the interests of putative class members – like
class counsel’s other individual clients – who have prophylactically filed (or may yet file)
lawsuits in state court. Their concern is that these putative class members might otherwise be
excluded from the class notwithstanding their right to discontinue their separate actions at a time
when decertification of this class action is no longer a possibility.
Defendants counter that plaintiffs’ proposed language is unduly confusing and
unnecessary. They propose an alternative amendment to the last sentence of the class definition,
which (in lieu of the underlined wording) would state: “Any person who has already filed a

1

Plaintiffs’ proposed amendment references “PA Paid Up Lease Rev. 05.11.2011,” but the correct identification of
the lease form is “PA Paid Up Lease Rev. 05.01.2011.”

3

separate federal court lawsuit related to lease bonuses is excluded from the Class.”2 Defendants
maintain that, by referencing other federal lawsuits, their proposed order will achieve the
purpose of keeping the landowners in Masciantonio out of the class while allowing class
counsels’ state court plaintiffs to remain in the class. Defendants state they are unaware of any
other Pennsylvania landowners, other than the Masciantonio plaintiffs, who have filed suit in
federal court related to lease bonuses. (See Defs.’ Resp. to Pls.’ Mot. Expedite Entry of Orders
at p. 3, ECF No. 128.) Their concern is that plaintiffs’ proposed language would encourage or
allow inappropriate “sideline-sitting,” i.e., a situation where a putative class member might opt
out of the class, file a separate lawsuit, then later dismiss the suit and rescind the opt-out after
waiting to see the outcome of dispositive motions in the two respective cases.
Analysis
The disagreement here centers on how to define the status of leaseholders who have filed,
or may yet file, parallel litigation involving claims for signing bonuses. Defendants claim that
they know of no other pending cases besides those involving the Masciantonios and class
counsel’s individual state court clients, but there could theoretically be other lawsuits pending
somewhere in the Commonwealth. Plaintiffs would clearly like these putative class members to
remain in the class, at least until the point where it becomes clear that there will be no
decertification. At least one treatise recognizes a “recurring issue” as to “whether a putative
class member’s participation in, or initiation of, separate litigation is a sufficient indication of a
desire to opt out of the class.” 3 William B. Rubenstein, NEWBERG ON CLASS ACTIONS §9:46 (5th
ed. 2013). According to Newberg, “[m]ost courts hold that pending parallel litigation is not
sufficient to communicate an opt-out request, . . . though a few courts have found that filing
2

Despite advocating this language, defendants did not include it in the proposed order attached as Exhibit B to their
response. (See ECF No. 128-2.)

4

separate litigation based on the same claims may be considered a reasonable indication of the
request to opt out.” Id. §9:46 (Supp. Dec. 2013) (emphasis in the original) (citing decisions
outside the Third Circuit).
Assuming, then, that other cases involving putative class members might be pending
either now or hereafter, the individual litigants would not necessarily be excluded from the class
under the majority rule unless they formally opted out in accordance with the procedures
approved by the court. Once class members request exclusion, they should ordinarily not be
permitted, without leave of court, to rescind their “opt out” after the court’s deadline for
rescinding exclusions has passed.3 See, e.g., Klein v. Robert's Am. Gourmet Food, Inc., 808
N.Y.S. 2d 766, 771 (N.Y. App. Div. 2006) (noting, in the context of a class settlement, that
“[g]enerally, permission to opt back in must be obtained from the court . . . unless the terms of
the settlement provide otherwise”); 3 William B. Rubenstein, NEWBERG ON CLASS ACTIONS
§9:45 (5th ed. 2013) (“‘[T]he state of the class at the end of the opt-out period should be fixed
enough to allow parties to conduct their affairs.’”) (quoting MANUAL FOR COMPLEX LITIGATION

3

Courts typically set a period for rescission of opt-outs that is either coextensive with, or slightly longer than, the
time period for requesting exclusion. See, e.g., In re Imprelis Herbicide Mktg., Sales Practices & Prod. Liab. Litig.,
No. 11-MD-02284, 2013 WL 509886, at *2 (E.D. Pa. Feb. 12, 2013) (allowing “[a]ny Class Member who opts out
[to] rescind or revoke such decision by submitting a written revocation to the Claims Administrator, provided such
revocation is postmarked by the Opt–Out Deadline”); Jaffe v. Morgan Stanley & Co., No. C 06-3903, 2008 WL
346417, at *14 (N.D. Cal. Feb. 7, 2008) (allowing 61-day opt-out period following mailing of class notice and 75day period for rescinding opt-outs); Int'l Longshore & Warehouse Union, Local 142 v. C. Brewer & Co., No.
CIV.CV0600260, 2007 WL 4145228, at *5 (D. Haw. Nov. 20, 2007) (45-day period for opting out and 60-day
period for rescinding a prior opt-out); Adams v. Inter-Con Sec. Sys., Inc., No. C-06-5428MHP, 2007 WL 3225466,
at *6 (N.D. Cal. Oct. 30, 2007) (45-day opt out period and 60-day rescission period); Tucker v. Walgreen Co., No.
CIV. 05-440, 2007 WL 2915578, at *4 (S.D. Ill. Oct. 5, 2007) (opt-outs due no later than 30 days prior to date set
for final fairness hearing on proposed class settlement; rescissions of opt-outs due no later than 10 days prior to the
fairness hearing); Satchell v. Fed. Express Corp., No. C 03 2878, 2007 WL 1114010, at *7 (N.D. Cal. Apr. 13,
2007) (45-day period for opting out and 52-day period for rescission of opt-out requests); Klein v. Robert's Am.
Gourmet Food, Inc., 808 N.Y.S.2d 766, 771 (N.Y. App. Div. 2006) (“It has been held... that if, prior to the deadline
set for requests for exclusion, an individual who has opted out clearly and unequivocally makes known to the court a
desire to opt back into the class, he or she should be able to rescind any prior contrary communication to the Court
asking to be excluded from the class.”) (internal quotation marks and citations omitted).

5

(FOURTH) §21.321 (2004)). This limitation on requesting exclusion and rescinding such requests
should prevent the kind of “sideline-sitting” that defendants are concerned about.
For those class members who may have filed (or will try to file) individual lawsuits while
also desiring to remain in the class, complications could potentially arise. The Manual for
Complex Litigation recognizes that “[p]ersons who are members of a certified federal court class
might pursue their own separate actions in the same court or in other courts even if they have not
elected to be excluded from the class.” MANUAL FOR COMPLEX LITIGATION (FOURTH) §21.42
(2004). The Manual for Complex Litigation recommends that federal courts in these situations
consider coordinating the parallel litigation with other courts, where possible. Id. Alternatively,
if informal coordination is unsuccessful, the federal court overseeing the class action may
entertain a motion to enjoin individual related cases on the ground that they conflict with, or
threaten the integrity of, the federal class action. Id. See 28 U.S.C. §2283 (“A court of the
United States may not grant an injunction to stay proceedings in a State court except as expressly
authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or
effectuate its judgment.”)(emphasis supplied); In re Diet Drugs Prods. Liab. Litig., 282 F.3d
220, 235 (3d Cir. 2002) (holding that “a federal court entertaining complex litigation, especially
when it involves a substantial class of persons from multiple states, or represents a consolidation
of cases from multiple districts, may appropriately enjoin state court proceedings in order to
protect its jurisdiction.”) (citing Carlough v. Amchem Prods., Inc., 10 F.3d 189, 202-04 (3d Cir.
1993)); Eberle v. Wilkinson, No. CIVA 2:03-CV-272, 2008 WL 886138, at *2 (S.D. Ohio Mar.
28, 2008) (“Where duplicative federal actions are pending, a federal court may, in the exercise of
its discretion, stay one of the actions, permit both actions to proceed, or enjoin parties from
proceeding in one of those actions. . . . ‘In weighing these three options, courts often proceed ...

6

under the rule of thumb that the entire action should be decided by the court in which an action
was first filed.’”) (citing and quoting Smith v. Sec. and Exchange Comm’n, 129 F.3d 356, 360
(6th Cir. 1997)) (second ellipsis in the original). Ultimately, “[t]he binding effect of a judgment
in an individual or class action on other related actions depends on principles of claim and issue
preclusion.” MANUAL FOR COMPLEX LITIGATION (FOURTH) §21.42 (2004).
As matters presently stand in this case, there does not appear to be any present danger of
overlapping lawsuits or conflicting adjudications. The Masciantonio plaintiffs’ lease claims
were already successfully resolved and, in any event, their lease was found to be materially
distinguishable from the ones at issue in this case, in part because of a particular provision in
their lease addendum. See Masciantonio v. SWEPI LP, No. 4:13-CV-797, 2016 WL 3856122, at
*6 n. 4 (M.D. Pa. July 15, 2016). Class counsel’s individual clients have reportedly stayed their
state court litigation pending further developments in this case. They apparently intend to
dismiss those lawsuits at such time as the risk of decertification no longer exists or the merits of
this case are adjudicated. Defendants are in the best position to know whether any additional
claims for lease bonus payments are pending in this Commonwealth, and they represent that, to
the best of their knowledge, no additional individual lawsuits are currently pending.
To the extent other individual lawsuits may present themselves, plaintiffs’ proposed order
seems preferable to that of defendants. Unlike defendants’ proposal, plaintiffs’ language does
not artificially differentiate between lawsuits filed in state court and those filed in federal court.
Plaintiffs’ language recognizes that, in either situation, the claimants in these cases are
presumptively members of this class unless they opt out. The concern expressed by defendants
about “sideline sitting” will be eliminated by this court’s establishment of a firm deadline for
opting out of the class and for rescinding prior exclusion requests. (The latter point is discussed

7

infra.) In the somewhat unlikely event that additional, individual claimants present themselves
and do not want to opt out of this litigation, the court can adequately address these contingencies
on a case-by-case basis. Specifically,


the court can evaluate in the first instance whether the individual case has been or will be
stayed pending developments in this case; and



if the individual case is not stayed, this court can consider coordinating pretrial
proceedings with the other court or, if appropriate, entertain a motion to enjoin the
individual action based on considerations of judicial economy, comity, and issue and
claim preclusion.
Based upon the foregoing considerations, the court approves plaintiffs’ proposed changes

to the class definition, with the clarification that the new class definition shall refer to Lease
Form “05.01.11” rather than “05.11.11.” (See n.1, supra.)
II.

The Parties’ Joint Contested Motion for Approval of Plan of Class Action
Notice (ECF No. 114)
A. Reference in the Class Notice Order Regarding a Deadline for Opt-Outs or
Rescissions of Opt-Outs From the Class
A dispute remains concerning the Class Notice Order with respect to the applicable time-

frame for opting out of the class or rescinding exclusionary requests. Plaintiffs’ proposed form
of order (ECF No. 127-3 at 3-4, ¶¶ 5-7) states the following:
5. The Exclusionary Period. The expiration date of the exclusionary (opt-out)
period described in each Mail and Publication Notice shall be set by Class Counsel to be
such date as is not less than 60 days following the first mailing of the Mail Notices.
6. Additional Class Members. If as the result of the publication of notice or
otherwise, any person who has not received a Mail Notice communicates to Class
Counsel what he determines to be a creditable claim of membership in the class, Class
Counsel shall immediately: (1) notify Defendants’ Counsel of the claim of such person;
and (2) transmit a Mail Notice by U.S. First Class Mail to such person, who shall, to the
extent any then remaining unexpired portion of the exclusionary period does not
accommodate same, be accorded not less than twelve days from the date of such mailing
within which to elect exclusion. Notwithstanding the foregoing no person not listed in
Exhibit 3 shall be added to the putative class who does not first contact class counsel
prior to such date as is the earlier of 30 days prior to the date of the commencement of
trial and 90 days following the filing of a dispositive motion by any party.

8

7. Class Counsel’s Certifications. Within 20 days following expiration of the
date of the exclusionary period, Class Counsel shall cause to be filed declarations as
follows:
(a) certifying that the Mail Notices shall have been mailed in accordance
with this Order, with specificity as to the name and address of each
addressee and the date of mailing to such addressee;
(b) certifying that the Publication Notices shall have been published in
accordance with this Order, with specificity as to the date on and
newspaper in which each shall have been published; and
(c) certifying the identity of each person who has timely elected (and not
thereafter rescinded) exclusion from the class, and shall thereafter file such
supplemental certifications as may be necessary to update same by reason
of additional timely rescissions and exclusions.

Plaintiffs maintain that the purpose of their proposed language is simply to protect the
monetary claims of class members who have not, heretofore, been identified. They acknowledge
that persons coming within the class definition are automatically members of the class, whether
they realize it or not (assuming they do not opt out); however, plaintiffs are concerned that the
monetary claims of those class members who are not yet on the class roster will remain unknown
and unasserted in the damages phase of this litigation unless there is a fair mechanism in place
for allowing these individuals to identify themselves and their monetary claims prior to judgment
or settlement.
Defendants object that plaintiffs’ proposed language creates uncertainty about the
effective date by which putative class members must opt out of the class (or rescind any
exclusion requests). Defendants assert that, in emails exchanged after the August 11, 2016
motion hearing, class counsel explained his understanding that paragraphs 6 and 7 would allow
any class member opting out of the class a period of up to “90 days following the filing of a
dispositive motion to change their minds.” (ECF No. 127-1 at 11-12.) Defendants object to any
process that allows putative members to come and go until 90 days after a dispositive motion is

9

filed. To that end, and to avoid confusion about who is in or not in the class, defendants propose
the following changes to Paragraphs 5 through 7:
5. The Exclusionary Period. The expiration date of the exclusionary (opt-out)
period described in each Mail and Publication Notice shall be set by Class Counsel to be
such date that is as is not less than 60 days following the first mailing of the Mail
Notices. To be effective, any exclusion request and any request for rescission of any
exclusion request must be received by Class Counsel by the end of the 60-day
Exclusionary Period. After receipt of any written request for exclusion from the Class
from any putative Class member, neither Class Counsel nor Defendants’ Counsel may
contact or communicate with such person concerning the opt-out request, except with
prior permission of the Court.
6. Additional Class Members. If as the result of the publication of notice or
otherwise, any person who has not received a Mail Notice communicates to Class
Counsel what he determines to be a creditable claim of membership in the class, Class
Counsel shall immediately: (1) notify Defendants’ Counsel of the claim of such person;
and (2) transmit a Mail Notice by U.S. First Class Mail to such person, who shall, have
until the end to the extent any then remaining unexpired portion of the Eexclusionary
Pperiod does not accommodate same, be accorded not less than twelve days from the date
of such mailing within which to elect exclusion. Notwithstanding the foregoing no
person not listed in Exhibit 3 shall be added to the putative class roster who does not first
contact class counsel prior to the end of the Exclusionary Period such date as is the earlier
of 30 days prior to the date of the commencement of trial and 90 days following the filing
of a dispositive motion by any party.
7. Class Counsel’s Certifications. Within 20 days following expiration of the
date of the exclusionary period, Class Counsel shall cause to be filed declarations as
follows:
(a) certifying that the Mail Notices shall have been mailed in accordance
with this Order, with specificity as to the name and address of each
addressee and the date of mailing to such addressee;
(b) certifying that the Publication Notices shall have been published in
accordance with this Order, with specificity as to the date on and
newspaper in which each shall have been published; and
(c) certifying the identity of each person who has timely elected (and not
thereafter timely rescinded) exclusion from the class, and shall thereafter
file such supplemental certifications as may be necessary to update same
by reason of additional timely rescissions and exclusions.

(ECF No. 128-4 at 3-4.)

10

Analysis
The problem identified by class counsel – how to protect valid claims of belatedly
identified class members – was addressed at some length during the August 11, 2016 motion
hearing. (See Hrg. Tr. at 35-43.) The court recognized that individuals coming within the
parameters of the class definition are members of the class automatically, but the claims of those
class members could be inadvertently compromised if they are not identified and asserted prior
to a final monetary judgment being entered. After discussing the problem at some length, the
court tentatively approved, and defense counsel seemingly stipulated to, the language that is now
set forth in Paragraph 6 of plaintiffs’ proposed order. (See Hrg. Tr. at 40-43 and Proposed Order,
ECF No. 126-1, at 3, ¶6; compare Order at ECF No. 127-3, at 3, ¶6.)
Nevertheless, the court will revisit the opt-out scheme set forth in plaintiffs’ proposed
class notice order in an effort to simplify and streamline the opt-out procedures. Rule 23
requires the class notice to state “that the court will exclude from the class any member who
requests exclusion” and to fix “the time and manner for requesting exclusion.” Fed. R. Civ. P.
23(c)(2)(B)(v) and (vi). According to the Manual for Complex Litigation, “[c]ourts usually
establish a period of thirty to sixty days (or longer if appropriate) following mailing or
publication of the notice for class members to opt out.” MANUAL FOR COMPLEX LITIGATION
(FOURTH) §21.321 (2004).4 Notwithstanding this, a judge usually has the discretion to treat a
tardy opt-out request as effective. According to the Manual for Complex Litigation:

4

Plaintiffs cite Sunrise Toyota, Ltd. v. Toyota Motor Co., 17 Fed. R. Serv. 2d 132, 1973 WL 778, at *4 (S.D.N.Y.
1973), for the proposition that a class member may rescind his exclusion request at any time before adjudication
and, therefore, an exclusion request is actually inchoate until that time. (See Pls.’ Br. at 6 (ECF No. 129).)
Plaintiffs’ interpretation appears to be an overly broad reading of Sunrise Toyota, which involved requests for
exclusion from a class-wide settlement. In Sunrise Toyota, the court construed a previous version of Rule 23(c) as
“indicat[ing] that a member of the class is not legally excluded from the class until the court so orders,” and
therefore, “a member of the class is entitled to withdraw the request for exclusion before it has been incorporated
into a court order.” 1973 WL 778, at *4. Because the court had not yet ruled on certain requests for exclusion at the
time that some of the requests were rescinded, the court recognized the rescissions as valid. The court did not hold

11

[f]actors affecting this decision include the reasons for the delay, whether there
was excusable neglect, and whether prejudice resulted.[ ] Relief from deadlines,
however, should be granted only if the delinquency is not substantial or if there is
good cause shown. The state of the class at the end of the opt-out period should
be fixed enough to allow parties to conduct their affairs. A general extension of
time for making the election may be appropriate if logistical or other problems
require further mailings or publications.
MANUAL FOR COMPLEX LITIGATION §21.321. Newberg suggests that belated opt-outs be
analyzed under a traditional “excusable neglect” standard:
A class member who fails to meet the deadline but still wishes to be excluded
from the class must show excusable neglect for her failure to opt out. The
standard arises from the court’s discretion to grant an extension of time under
Federal Rule of Civil Procedure 6(b)(2), to grant relief from its judgment or
orders under Rule 60(b)(1), and to enter orders managing class actions under Rule
23(d); it is identical under all three. To demonstrate “excusable neglect,” a
movant “must show both good faith and a reasonable basis for not acting within
the specified period.” [ ] Even if a litigant meets that standard, however, the
district court retains discretion to grant or deny the extension.
NEWBERG ON CLASS ACTIONS § 9:45 (internal footnotes omitted).
Here, as an alternative to plaintiffs’ proposed paragraphs 5 through 7, the court will
establish a 60-day period during which class members may opt-out of the class or rescind any
prior opt-out requests. To the extent any belatedly identified class members indicate a desire to
exclude themselves from this litigation after the passing of this deadline (or belatedly attempt to
rescind an opt-out), the court will address their circumstances after a motion is filed raising that
matter. The motion will be resolved on an individualized basis under the usual “excusable
neglect” standard.
For presently unidentified class members who would want to remain in the class, the
question arises with respect to how their claims can be protected. Plaintiffs are concerned about

that, in every Rule 23(b)(3) class action, exclusionary requests may necessarily be rescinded up until the time a final
order of adjudication is entered. Moreover, the case is potentially distinguishable insofar as the court indicated it
“would apply the traditional powers of an equity court to permit the withdrawals of the requests for exclusion
because all parties consent to it and no one is prejudiced by it.[ ]” Id. (footnote omitted). Similar facts are not
present in the instant case at this juncture.

12

the monetary claims of unidentified class members that may never be asserted. It, however, is
premature to address this contingency at the present time. By definition, unidentified class
members remain part of the class and will receive the benefit of any favorable liability
determination. Prejudice to those individuals would occur, if at all, only in the event that they
are left out of a favorable monetary judgment. At this point, it is impossible to know whether
such a scenario will come to pass, since it remains to be seen, e.g., whether there will be a
settlement, whether future developments will necessitate a decertification of the class, whether
plaintiffs will prevail on the liability issue, whether bifurcation of liability and damages will be
appropriate, whether the resolution of damages will proceed on an individualized basis or
whether damages issues will be determined on a class-wide, formulaic basis.
To the extent plaintiffs ultimately prevail on the issue of liability and it becomes
necessary to revisit the claims of unidentified class members, it is worth noting that Rule
23(d)(1)(B) authorizes the court to give class members “appropriate notice” at “any step in the
[class] action,” including notice as to “the proposed extent of the judgment.” Fed. R. Civ. P.
23(d)(1)(B). Thus, the rule provides an opportunity for the court to impose a notice and claims
procedure, similar to the procedures utilized in class-wide settlements, whereby class members
are constructively notified that they must assert a damages claim within a defined time period or
risk waiving such claim. Monetary claims that are raised belatedly after the deadline can be
addressed, if need be, on an individualized basis based on considerations of excusable neglect,
good cause, and due process.
Admittedly, these circumstances create some degree of uncertainty about the full extent
of defendants’ potential liability for damages in this case. On balance, however, it is not unfair
that defendants should shoulder the burden of this uncertainty. First, this is a relatively small and

13

well-defined class. Although the precise parameters of the class have changed over time, the
class roster has been fairly well vetted at this point, and it seems unlikely that the roster will
grow significantly once notice has been sent and the time for opting out has expired. Second,
because defendants have at all times been in possession of the information from which class
membership was derived, it is reasonable to burden them with the risk that as-yet unidentified
members may be added to the roster at a later point in time. Third, while defendants suggest that
the class roster should be rigidly fixed as of the date that serves as the opt-out deadline, Rule 23
does not appear to require such rigidity. For example, the Manual for Complex Litigation
suggests only that “[t]he state of the class at the end of the opt-out period should be fixed enough
to allow parties to conduct their affairs.” See MANUAL FOR COMPLEX LITIGATION (FOURTH)
§21.321 (2004). Fourth, defendants’ interests will be adequately protected if, as explained
above, the court resolves belated requests for monetary payments based upon concepts of
excusable neglect, good cause, and due process.
In light of the foregoing considerations, the court will not approve the language set forth
in paragraphs 5 through 7 of plaintiffs’ proposed order. Instead, the court approves the more
straightforward approach outlined in defendants’ paragraphs 5 through 7. However, the court
will direct that the second sentence in paragraph 5 of defendants’ proposed order be amended to
read as follows: “To be effective, any exclusion request and any request for rescission of an
exclusion request must be received by Class Counsel by the end of the 60-day Exclusionary
Period, unless the court finds that excusable neglect or good cause for the delinquency is
shown.”5 In addition, the court will direct that paragraph 6 of defendants’ proposed order be
amended to read as follows:

5

As discussed in more detail below, the court will also direct that the last sentence in defendants’ paragraph 5 be
stricken.

14

6. Additional Class Members. If, as the result of the publication of notice or
otherwise, any person who has not received a Mail Notice communicates to Class
Counsel what he determines to be a credible claim of membership in the class,
Class Counsel shall immediately: (1) notify Defendants’ Counsel of the claim of
such person; and (2) transmit a Mail Notice by U.S. First Class Mail to such
person. The newly identified class member shall have until the end of the
Exclusionary Period within which to elect exclusion, unless the court finds that
excusable neglect or good cause for the delinquency is shown. Any such newly
identified class member who is not excluded from the class shall be added to the
class roster set forth in Exhibit 3.
Finally, the court will direct that paragraph 7(c) of defendants’ proposed order be amended to
read as follows: “(c) certifying the identity of each person who has timely elected (and not
thereafter effectively rescinded) exclusion from the class, and shall thereafter file such
supplemental certifications as may be necessary to update same by reason of additional
rescissions and exclusions as permitted by the court.”

B. Language in the Class Notice Order Restricting Class Counsel from
Contacting Putative Class Members Following Receipt of an Opt-Out
At the August 11, 2016 hearing, the court addressed the question whether exclusionary
requests should be sent to both parties’ attorneys or to class counsel only. Defense counsel’s
concern was that, if notice went only to plaintiffs’ counsel, class counsel might discourage class
members from opting out of the litigation. To prevent this situation, defendants sought
restrictions on class counsel’s ability to have unilateral contact with potential opt-outs.
The court determined that opt-out requests need be sent only to class counsel, as there
was little precedent for notice being sent to defense counsel, and allowing this might create other
problems. (See Hrg. Tr. at 25:20-22.) Further, the court declined to place any prior restraints on
class counsel’s ability to have contact with potential opt-outs in the absence of evidence of
misconduct or some authority justifying such measures. (Id. at 26-32.)

15

In responding to the pending motion, defendants renewed their argument on this issue.
Once again, they seek to include in the Class Notice Order a narrow restriction on the ability of
class counsel to communicate further with putative members once they have made the election to
opt out of the class. To that end, defendants propose the inclusion of the following language in
the last sentence of paragraph 5: “After receipt of any written request for exclusion from the
Class from any putative Class member, neither Class Counsel nor Defendants’ Counsel may
contact or communicate with such person concerning the opt-out request, except with prior
permission of the Court.” (ECF No. 128-4.)
Defendants maintain that this prohibition is necessary because class counsel indicated the
intention to contact opt-outs in order to discuss with them whether they should rescind their optout request. Defendants remain concerned that class counsel will solicit rescissions. They
maintain that the case law does not support the right of class counsel to engage in
communications that are designed to discourage opt-outs once the exclusion request is received.
(See Defs.’ Br. at 8-10, ECF No. 128 (citing Impervious Paint Indus., Inc. v. Ashland Oil, 508 F.
Supp. 720, 722 (W.D. Kan. 1981); In re Katrina Canal Breach Consol. Litig., Civil Action No.
05-4182, 2008 WL 4401970, at *3 (E.D. La. Sept. 22, 2008) (citing ABA Ethics Opinion, formal
Op. 07-445, at 3 (2007)); Parks v. Eastwood Ins. Servs., Inc., 235 F. Supp. 2d 1082, 1083 (C.D.
Cal. 2002) (“In a class action certified under Rule 23 . . . absent class members are considered
represented by class counsel unless they choose to ‘opt out.’”); Bobryk v. Durand Glass Mfg Co.,
No. 12-Civ-5360, 2013 WL 5574504, at *9 (D.N.J. Oct. 9, 2013) (holding that “until a rule 23
class is certified and the opt-out period expires, defense counsel is not completely barred from
communicating with putative class members" under New Jersey’s professional conduct rules).).

16

Plaintiffs counter that any prior restraint on their counsel’s speech must be in accordance
with Gulf Oil Co. v. Bernard, 452 U.S. 89 (1981). Class counsel contends it is his obligation to
contact class members who indicate a desire to opt out in order to insure that their decision is
“knowledgeably done,” and not attributable to a misunderstanding of the class notice or other
factor (such as a belief that they could not participate in the class litigation if they had released
their property or if their title was infirm). Class counsel represents it is not his intention to
discourage opt-outs, and he intends to make that clear in dealing with these class members;
however, he believes that the complexities of the case warrant at least a “carefully neutral
contact” to ensure that the opt-out is an informed one. (Pls.’ Br. at 5, ECF No. 129.) Plaintiffs
also assert that “because a class member may rescind his exclusion request at any time before
adjudication, an exclusion request is actually inchoate until then, when it becomes final.” (Id. at
6.)
Analysis
“Under Rule 23(d), a district court has a duty to ‘safeguard class members from unauthorized
[and] misleading communications from the parties and their counsel.’” Bayshore Ford Truck
Sales, Inc. v. Ford Motor Co., 541 F. App'x 181, 186 (3d Cir. 2013) (quoting In re Cmty. Bank of
N. Va. & Guar. Nat'l Bank of Tallahassee Second Mortg. Loan Litig., 418 F.3d 277, 310 (3d Cir.
2005)) (alteration in original). To that end, “a court may enter orders necessary to protect the
integrity of the litigation.” Id. at 186 (citing Cmty. Bank, 418 F.3d at 310).
The propriety of prior restraints on counsel’s ability to communicate with absent class
members continues to be governed by the standard set forth in Gulf Oil Co. v. Bernard, 452 U.S.
89 (1981). There, the Supreme Court made clear that:
[A]n order limiting communications between parties and potential class members
should be based on a clear record and specific findings that reflect a weighing of
17

the need for a limitation and the potential interference with the rights of the
parties.[ ] Only such a determination can ensure that the court is furthering, rather
than hindering, the policies embodied in the Federal Rules of Civil Procedure,
especially Rule 23.[ ] In addition, such a weighing—identifying the potential
abuses being addressed—should result in a carefully drawn order that limits
speech as little as possible, consistent with the rights of the parties under the
circumstances.
452 U.S. at 101–02 (internal footnotes omitted) (citing Coles v. Marsh, 560 F.2d 186, 189 (3d
Cir.1977)(“[T]o the extent that the district court is empowered ... to restrict certain
communications in order to prevent frustration of the policies of Rule 23, it may not exercise the
power without a specific record showing by the moving party of the particular abuses by which it
is threatened. Moreover, the district court must find that the showing provides a satisfactory
basis for relief and that the relief sought would be consistent with the policies of Rule 23 giving
explicit consideration to the narrowest possible relief which would protect the respective
parties.”).
In In re Community Bank of Northern Virginia, 418 F.3d 277 (3d Cir. 2005), the Court of
Appeals for the Third Circuit considered the propriety of a district court order that broadly
prohibited various outside law firms from communicating with members of a settlement class
unless the firms first submitted their proposed communications to the court for approval. The
court of appeals recognized that the district court had authority to manage the settlement process
because misleading communications by counsel who solicited opt-outs could have a detrimental
effect on the class notice procedure and the fair administration of justice. 418 F.3d at 311.
Nevertheless, the court of appeals vacated the district court’s order because the district court had
failed to abide by the tenets of Gulf Oil. Specifically,
the District Court never specified which portions of the solicitation letters were
objectionable. . . . It conducted no evidentiary hearing, set no briefing schedule, and
gave Appellants no practicable opportunity to be heard.[ ] The October 14, 2003 Order
provided only that: “[f]or good cause, the Court invalidates and declares void all
18

solicited opt-outs by class members from Georgia, Missouri, Illinois, Maryland, Florida
and Alabama.” . . . . The District Court did not state what such “good cause” was.
481 F.3d at 311-12.
In this case, class counsel acknowledges his intent to initiate contact with absent members
who indicate a desire to opt-out of the class. Previously, in their brief filed on June 6, 2016 (ECF
No. 115), plaintiffs stated that “Class Counsel must be free to communicate with members who
submit exclusions so as to be certain that they fully understand the ramifications of doing so,”
especially where there is a “high probability that the statute of limitations have run. . . .” (Pls.’
Br. Sur Jt. Contested Mot. Approval of Plan of Class Action Notice, ECF No. 115, at 12.) In
plaintiffs’ most recent filing, class counsel reiterates the belief that class counsel is professionally
obligated to contact absent class members in order to ensure that any opt-outs are “knowledgably
done, and not attributable to some misunderstanding of the Notices or other factor (e.g., a belief
that they could not participate if they had re-leased their property to another, or that their title
was infirm, each of which will be a matter of defense to be ultimately decided by the Court).”
(Pls.’ Br. at 4-5, ECF No. 129.)
Defendants insist that case law does not support the right of class counsel to discourage optouts or encourage the rescission of exclusionary requests once they are received. Class counsel,
however, expressly denies any intention to discourage opt-outs and represents that class counsel
will “objectively make that clear” in dealing with individuals who request exclusion. (Pl.s’ Br. at
5, ECF No. 129.) Class counsel maintains, nonetheless, that “the complexities of this case
warrant at least a carefully neutral contact as could assure that the opting out-member has
knowledgeably done so.” (Id.) Class counsel previously explained this position at the August
11, 2016 hearing:

19

Your Honor, if this were an individual case and my one client was suing Shell and
my client called me and said, you know, I am not sure I want to stay on this route, I
think I want to discontinue the case; and I call him back and say, well, let me
understand why because you may have a – the reason you have may not be a
legitimate one legally, let me hear what you have to say; at that point I am still acting
as their lawyer. That’s all I am going to do.
To use the phrase, I am going to talk them out of it, that’s not what lawyers do.
Lawyers are supposed to give people the facts, make sure they understand the facts,
and then honor their decision based on those facts. That’s what I intend to do as
class counsel.
(Hrg. Tr. at 27:13-28:1.)
Based upon the record as it presently stands, there is no evidence to suggest that class
counsel has behaved, or will likely behave in a manner that would have a detrimental effect on
the class notice procedure and the fair administration of justice. The parties’ dispute about this
point raises a question, however, about the proper role of class counsel during the opt-out period
and, in particular, whether a true “attorney-client” relationship exists between class counsel and
the class members who request exclusion. Notably, there is a split of authority concerning when
the attorney-client relationship forms in a Rule 23(b)(3) class action. See 3 William B.
Rubenstein, NEWBERG ON CLASS ACTIONS §9:8 (5th ed. 2013) (discussing split of authority and
noting that “[d]uring a period in which class members are considering the possibility of opting
out of the class, the attorney-client relationship may be slightly more amorphous because class
members are deciding whether or not to remain in that very relationship.”).
Some courts in Pennsylvania and elsewhere have suggested that an attorney-client
relationship forms upon certification of the class, or even prior thereto, such that defense counsel
is ethically precluded from contacting absent class members. See, e.g., Kleiner v. First Nat’l
Bank of Atlanta, 751 F.2d 1193, 1206-07 (11th Cir. 1985) (“defense counsel had an ethical duty
to refrain from discussing the litigation with members of the class as of the date of class

20

certification”); Good v. W. Virginia-Am. Water Co., No. CV 2:14-01374, 2016 WL 6404006, at
*2 (S.D.W. Va. Oct. 26, 2016) (“Following certification of a class action, ‘an attorney-client
relationship arises between all members of the class and class counsel.’”) (quoting Fulco v.
Continental Cablevision, Inc., 789 F. Supp. 45, 47 (D. Mass. 1992)); Gortat v. Capala Bros.,
Inc., No. 07-CV-3629, 2010 WL 1879922, at *2 (E.D.N.Y. May 10, 2010) (“A number of courts
have held that this relationship arises once the class has been certified and not only at the end of
the opt-out phase.”); see also Phila. Bar Assn. Prof. Guid. Comm., Ethics Op. 2009-1, 2009 WL
964148, at *2 (April 1, 2009) (“Pennsylvania courts have interpreted [Pennsylvania Rule of
Professional Conduct] 4.2 as barring defense counsel in a state class action from contacting
current or former employee class members regarding the subject matter of the lawsuit prior to a
decision on certification (unless accomplished via deposition or other formal means of discovery
with proper notice provided to the plaintiff's counsel).”) (citing authority); Gates v. Rohm &
Haas Co., No. CIV.A. 06-1743, 2006 WL 3420591, at *2 (E.D. Pa. Nov. 22, 2006) (prior to
denial of certification, Rule 4.2 prohibited defense counsel from contacting or interviewing
potential witnesses who are putative class members); Braun v. Wal-Mart Stores, Inc., 60 Pa. D.
& C. 4th 13, 19 (Phila. Ct. Com. Pl. 2003) (court denied the defendant’s request to interview and
obtain affidavit testimony from putative class members, finding that “under Pennsylvania law
putative class members are parties to the action until the court declines to certify the action” and
they should therefore be “afforded the protections of Rule 4.2 of the Rules of Professional
Conduct”).
On the other hand, other courts, and the American Bar Association, have expressed the
view that the attorney-client relationship is not formed until expiration of the opt-out period.
See, e.g., In re Wells Fargo Wage & Hour Emp’t Practice Litig., 18 F. Supp. 3d 844, 851 (S.D.

21

Tex. 2014); Velez v. Novartis Pharm. Corp., No. 04 Civ. 9194, 2010 WL 339098, at *2
(S.D.N.Y. Jan. 26, 2010); In re Katrina Canal Breaches Consol. Litig., Civil Action No. 054182, 2008 WL 4401970, at *3 (E.D. La. Sept. 22, 2008)(“‘A client-lawyer relationship with a
potential member of the class does not begin until the class has been certified and the time for
opting out by a potential member of the class has expired.’”)(quoting ABA Committee on Ethics
& Prof’l Responsibility, Formal Op. 07-445, at 3 (2007)); The Kay Co., LLC v. Equitable Prod.
Co., 246 F.R.D. 260 (S.D. W. Va. 2007) (citing ABA Formal Opinion 07-445); see also 2
McLaughlin on Class Actions §1:11 (13th ed. 2016) (“The majority rule is that... absent class
members are not represented parties prior to class certification and the expiration of any opt-out
period.”).
In Community Bank of Northern Virginia, 418 F.3d 277 (3d Cir. 2005), the Court of
Appeals for the Third Circuit intimated that something less than a traditional “attorney-client
relationship” exists between class counsel and absent class members during the opt-out phase of
class litigation. In commenting on this point, the court of appeals took issue with the district
court’s suggestion that outside law firms, in soliciting class members to opt out of a class-wide
settlement, had possibly violated ethical norms by engaging in “direct solicitations for
prospective clients whom they knew to be represented by another lawyer.” Id. at 313. The court
of appeals explained:
[C]ourts have recognized that class counsel do not possess a traditional attorney-client
relationship with absent class members. See Cobell v. Norton, 212 F.R.D. 14, 17
(D.D.C. 2002); cf. Greenfield [v. Villager Indus. Inc., 483 F.2d 824, 832 (3d Cir. 1973)]
(providing that class counsel has “fiduciary” relationship with absent class members);
In re Shell Oil Refinery, 152 F.R.D. 526, 528 (E.D. La.1989) (stating that “constructive”
attorney-client relationship exists once opt-out period has closed). As stated in In re
McKesson HBOC, Inc. Sec. Litig., 126 F.Supp.2d 1239 (N.D. Cal. 2000),
While lead counsel owes a generalized duty to unnamed class members, the
existence of such a fiduciary duty does not create an inviolate attorney-client
22

relationship with each and every member of the putative class. Taken to an
extreme, lead plaintiff's logic suggests that putative class members are forever
walled off from any effort at solicitation, a proposition that seems unsupportable.
Id. at 1245; see also Morisky v. Pub. Serv. Elec. & Gas Co., 191 F.R.D. 419, 424
(D.N.J. 2000) (providing that class counsel could not assert attorney-client privilege
over questionnaires completed by putative class members); 5 Alba Conte & Herbert B.
Newberg, Newberg on Class Actions § 15:16 (4th ed. 2002) (stating that once opt-out
period ends “[t]he attorneys for the class have assumed fiduciary obligations or
constructive attorney-client status with respect to the class”).
In re Cmty. Bank of N. Va., 418 F.3d at 313 (footnote omitted).
Thus, Community Bank of Northern Virginia suggests that the Third Circuit Court of
Appeals would recognize some kind of fiduciary relationship between class counsel and absent
class members during the opt-out period, though perhaps something less than the traditional
attorney-client relationship. See Dondore v. NGK Metals Corp., 152 F.Supp. 2d 662, 666 (E.D.
Pa. 2001) (holding that “putative class members stand at least in a fiduciary relationship with
class counsel) (citing In re Gen. Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55
F.3d 768, 822 (3d Cir.1995)). To the extent class counsel compares the absent class members to
class counsel’s private clients, class counsel may be overstating matters, but -- even so -- there is
little authority for limiting contact between class counsel and absent class members during the
opt-out stage of class litigation. The interests of class counsel and absent class members are
generally aligned. See NEWBERG ON CLASS ACTIONS §9:8 (“[W]hile courts retain the authority
to regulate class counsel’s postcertification communications under the Supreme Court’s Gulf Oil
standards, they rarely have occasion to do so. Counsel’s interests are generally aligned with
those of the class in such a manner as to minimize the likelihood of malfeasance warranting a
protective order[.]”) (internal footnotes and citations omitted). As the court discussed in
Impervious Paint Industries, Inc. v. Ashland Oil, 508 F. Supp. 720, 272 (W.D. Ky. 1981), the

23

concern is that class counsel should not interfere with the notice process by discouraging optouts:
During the time between the institution of a class action and the close of the optout period, the status of plaintiffs' counsel in relation to the class members cannot
be stated with precision. While class counsel clearly have the duty to represent
the interests of the absent class members, it would also appear that contact
initiated by class counsel prior to the close of the opt-out period would be
unethical as direct solicitation of clients, if the purpose or predictable effect
of the contact is to discourage a decision to opt out of the class. Thus, the
peculiar status of the class member during this period of time may place
additional burdens on class counsel: For purposes of the obligation to avoid
compromising the rights of the class members, class counsel must treat them as
clients; for purposes of the obligation to avoid unethical solicitation, class counsel
must treat the class members as non-clients.
508 F. Supp. 722 (emphasis added). Here, as noted, class counsel flatly denies any intention to
discourage opt-outs.
In sum, the record before this court does not support the kind of prior restraint that
defense counsel is seeking to impose in paragraph 5 of defendants’ proposed Class Notice Order.
Provided that class counsel merely shares information with absent members that is consistent
with, or already set forth in, the Class Notice, there is no reason to believe that class members
will be discouraged from opting out. Any concerns along these lines will be further abated if
class counsel: (a) presents information to permit a knowledgeable opt-out, (b) presents
information in a neutral fashion, including by duly noting those matters that are still debated and
yet to be decided by the court, and (c) reminds absent class members of their right to consult
their own attorney in determining whether to exclude themselves from the class. Class counsel
will be instructed to comply with these restrictions, which are consistent with what class counsel
stated would be communicated to an opting-out member. Based upon the foregoing
considerations, the language set forth in the last sentence of defendants’ paragraph 5 is not
approved.
24

C. Reference in the Class Notice to an “Exclusion Request Form”
At the August 11, 2016 motion hearing, the court addressed SWEPI’s request that its
proposed “exclusion request” form be included in the class notice mailing and that class
members be permitted to opt-out by returning the form to both defense counsel and class
counsel. The court ruled that class members would be permitted to opt out by email as well as
by regular mail, but it declined to permit the mailing of an “exclusion request” form to class
members, because the process for opting out by email would be relatively simple. (Mot. Hrg. Tr.
at 25-26, ECF No. 131.) The court further ruled that opt-out requests would only be sent to class
counsel.
Following the court’s ruling, the parties attempted, unsuccessfully, to negotiate a
finalized version of the “long-form” (i.e., mailed) and “short-form” (i.e. published) class notices
with language that would be satisfactory to both sides. Plaintiffs’ version of the mailed notice
contains the following language concerning methods for opting out of the class action:
There are three methods available: (1) you may simply complete the Exclusion
Request Form provided for your use at the website,
www.SWEPIclassaction.com; (2) you may send a letter to class counsel which
must contain your name, address, phone number, and stating that you want to be
excluded from the Walney v. SWEPI class action, and be mailed by First Class
Mail to Joseph E. Altomare, Class Counsel, 700 Rockwood Drive, Titusville, PA
16354; or (3) you may email a request containing all of the same information to
Class Counsel at [e-mail]. In each case, the request must be sent
by [DATE].
(Notice ¶15; ECF No. 127-3.) Plaintiffs’ proposed short-form notice contains substantially
similar language. (See ECF No. 127-3 at 15.)
Defendants object to plaintiffs’ reference to the “exclusion request” form based on the
court’s prior refusal to permit the mailing of such forms to class members. Defendants assert
that the parties had tentatively agreed on a form of notice that did not include the disputed
language (see 8/17/16 email, ECF No. 128-1 at 15, ¶15), but class counsel added the “exclusion
25

form” reference back in when submitting his latest proposed iteration of the notice (see ECF No.
127-3 at 12, ¶15). Defendants especially object to putative class members accessing the
exclusion form by downloading it from the class action website. Their concern is that this
process: (a) requires an additional step for anyone desiring to opt out; (b) gives class counsel
control over who obtains an “exclusion request” form; (c) permits class counsel to learn the
identity of potential opt outs, thereby enabling him to “head off any exclusion request by directly
contacting the putative class member in advance to try to convince the class member to not opt
out. . . ,” (Defs.’ Br. at 4, ECF No. 128); and (d) requires class members to confront and bypass a
cautionary webpage before downloading the exclusionary form. Defendants are concerned that
the content of the cautionary page (ECF No. 129-1 at 2) is non-neutral and will likely discourage
exclusions.
Plaintiffs respond that the disputed language was already included in their proposed
forms of notice at the time of the August 11, 2016 motion hearing (see ECF No. 114-9 at 8 and
ECF No. 123-1 at 7, ¶15); and, although the court declined to approve the use of a mailed
exclusion form, it did not strike the language in plaintiffs’ proposed notice allowing class
members to download a form from the class website. To the extent defendants object to the
cautionary web page (attached at ECF No. 129-1), plaintiffs insist the objection is baseless
because the webpage simply mirrors language from the notices which has already been
approved.
Analysis
Plaintiffs accurately note that, at the August 11, 2016 hearing, the court ruled that no
exclusion form would be included in the mailing to class members, but it did not specifically
prohibit class counsel from referring members to the class website to obtain such a form, because
26

the point was not raised. Plaintiffs are also correct in observing that their present form of notice
is similar to the one that was previously submitted to the court, insofar as both versions would
allow class members to obtain an exclusion form from the class website. Thus, technically, the
inclusion of this option does not conflict with the court’s rulings at the August 11, 2016 hearing.
Defendants’ real objection concerns the procedure and content that class members
confront when obtaining the form through the class website. Defendants are concerned that the
content of the cautionary web page (ECF No. 129-1, at 2) will discourage opt-outs. At the
August 11, 2016 hearing, the court ruled that class counsel should make the information on his
website conform to the court’s ruling and defense counsel should vigilantly monitor the website
and bring any concerns to the court’s attention. (See Hrg. Tr. at 43:23-49:3.) In general, the
information on the cautionary web page does appear to conform to the contents of the class
notice that the court has approved thus far. Thus, plaintiffs’ position on this point appears to be
well taken.
Defendants also object to referring a putative class member to the class webpage because
the webpage will provide class counsel a measure of control over the opt-out process that may
allow class counsel to discourage opt-outs or encourage rescissions of opt-out requests. This
objection relates back to the previous issue concerning class counsel’s intention to initiate
contact with class members in order to ensure that any exclusion requests are undertaken in a
knowledgeable fashion. For the reasons previously discussed, that contact should not be
problematic so long as class counsel’s advice conforms to the contents of the class notice, is
presented in a neutral fashion, reminds individuals of their right to consult their own attorney
concerning the issue of opting out, and does not otherwise discourage exclusion from the class.
Plaintiffs’ version of the mailed and published notice is approved with respect to the three

27

methods of opting out. Should defendants learn about conduct of class counsel that is
inconsistent with the representations made by class counsel to this court, defendants should
promptly bring that matter to this court’s attention.
III.

Conclusion
For the reasons set forth above, the parties’ Joint Contested Motion for Approval of Plan

of Class Action Notice will be granted with directions that the parties incorporate modifications
to the class notice forms and class order as set forth in this opinion. Plaintiffs’ Second Motion to
Amend Class Definition will be granted, and plaintiffs’ Motion to Expedite Entry of Orders will
be denied as moot.
An appropriate order will be entered.

Dated: January 23, 2017

/s/ Joy Flowers Conti
Joy Flowers Conti
Chief United States District Judge

28