Class actions: Securing the class list

The path to obtaining the names and contact information of putative class members

2015 October

A common theme in both consumer and employment class actions is the battle over the precertification discovery of the names and contact information of putative class members, often referred to as the “class list.” Under the broad discovery rules, the class list is almost always relevant evidence to support that the plaintiff’s allegations satisfy class-action requirements, yet the defendant will invariably object that the production of the names and contact information of individuals who are at that point absent from the litigation would violate their constitutional right of privacy. Thus begins a hard-fought, drawn-out process that may take several months; but in the end the effort is worthwhile and in some cases the mere threat of contacting putative class members may be enough to bring defendants to the negotiating table.

Why you need the list

For plaintiff’s counsel, obtaining the class list serves several important purposes depending on the facts of each case. For example, in wage-and-hour class actions, the employer defendant has an unfair advantage if it is the only party able to contact putative class members. In certain cases, such as those with off-the-clock claims or allegations that employees were misclassified, it is not uncommon for a defendant employer at the outset of the litigation to immediately start collecting supporting declarations that oppose the allegations set forth in the complaint. Thus, before plaintiff’s counsel can even obtain a class list from which to attempt to contact putative class members, the defendant may already have over a hundred signed declarations from current employees in its arsenal to combat a motion for class certification. In such cases, obtaining the class list is imperative to ensure a level playing field and obtain competing declarations.

Obtaining the class list may also be helpful where, for whatever reason, the class representative is not the ideal individual to protect and fight for the rights of class members, such that he or she may be uniquely susceptible to affirmative defenses, or challenges to his or her standing, typicality, or adequacy to represent the class. In rarer instances the class representative may simply be unreliable or impractical, such as the class representative that moves out of state and loses interest in the case after a year or two of litigation. Thus, by obtaining the class list plaintiff’s counsel will have access to individuals that can serve as an additional or back up named plaintiff in the event anything happens to disqualify the class representative.

Step 1: Request the class list through written discovery

The first step at the onset of the litigation is to request the class list through written discovery in the form of documents through a request for production of documents and in the form of a prepared list through a special interrogatory. Here it is critical to be detailed in the types of contact information requested. A mere request for “names and contact information” will inevitably lead to the defendant providing no more than the putative class members’ last known mailing addresses, which will make the process of contacting putative class members more tedious and expensive, while also limiting the number of people that can be contacted. As it plays out, if only mailing addresses are obtained, then plaintiff counsel will have to take on the added expense of mailing letters to putative class members, which request that the putative class members please contact their office so that they may speak with them. It is much easier to just pick up the phone or send an email. Of course, the more information requested, the greater the privacy interest, but if there are going to be any limitations imposed on the scope of the contact information that can be obtained, it only makes sense to leave that for the court to decide. Therefore, plaintiff’s counsel should be specific in requesting all reasonable contact information, including names, mailing addresses, home telephone numbers, cell phone numbers (as many individuals no longer have home telephones), and any email addresses on file (as many people have more than one).

Step 2: Enter into a stipulate protective order

In anticipation of a defendant’s objections, plaintiff’s counsel should recommend that the parties stipulate to a protective order to be entered by the court. Therefore when the defendant eventually raises a constitutional right to privacy objection, plaintiff’s counsel can mitigate the concern by allowing the defendant to designate any contact information as confidential pursuant to the protective order and thereby limit the invasion of any actual privacy interest. Many courts, including Los Angeles Superior Court, have a model protective order available on the court’s Website and use of the model protective order as a template is usually recommended by the judge in his or her standing order.

Step 3: Meet and confer and, if necessary, file a motion to compel

Defendant’s initial responses to written discovery concerning putative class member contact information will invariably object to providing such information on the grounds that the request for production or special interrogatory is overbroad, unduly burdensome, and violates the constitutional privacy rights of third parties. To overcome these objections, class counsel will undoubtedly have to meet and confer with defendant regarding applicable California law, the scope of the information requested, and the use of an opt-out privacy notice to adequately protect the privacy interests of the putative class members.

The case law

The right of class-action plaintiffs to obtain class member contact information is well developed under California law, subject to some limitations. The analytical framework for assessing objections based on an invasion of privacy under the California Constitution is set forth in Hill v. National Collegiate Athletic Assn. (1994) 7 Cal.4th 1 and applied to obtaining the names and contact information of putative class members in Pioneer Electronics (USA), Inc. v. Superior Court (2007) 40 Cal.4th 360 and its progeny.

In Pioneer, the California Supreme Court upheld the right of a plaintiff in a class action against a manufacturer that sold defective DVD players to obtain precertification discovery consisting of the names, addresses, and telephone numbers of each customer that complained of the defective product, subject to the use of an opt-out notice. (Pioneer, 40 Cal.4th at pp. 360, 373-74.) First, the Court found that customers that had complained to defendant and had already voluntarily given their contact information did not have a reasonable expectation that such information would be withheld from a class-action plaintiff, noting that “[i]f anything, these complainants might reasonably expect, and even hope, that their names and addresses would be given to a class action plaintiff.” (Id. at p. 372.) Second, the Court found that the revelation of names and contact information, subject to safe guards, including written notice and the opportunity to object, did not involve a serious invasion of privacy. (Id. at p. 373.) Finally, in balancing the opposing interests, the Court found that “from the standpoint of fairness” complaining customers would be percipient witnesses to the relevant defects at issue in the case and that the defendant “would possess a significant advantage if it could retain for its own exclusive use and benefit the contact information of those customers who complained regarding its product.” (Id. at pp. 373-374).

Soon after Pioneer, the reasoning of the Court’s decision was applied to the disclosure of current and former employee names and contact information in the wage and hour case Belaire-West Landscaping, Inc. v. Sup. Ct., (2007) 149 Cal.App.4th 554. In Belaire-West, the Court noted the contrast between employees that provided their contact information to an employer (Belaire-West), and complaining customers that voluntarily provided their information to a manufacturer (Pioneer), but found this distinction did not have any effect when it came to the putative class members’ reasonable expectation of privacy, noting that just as the dissatisfied Pioneer customers, current and former Belaire-West employees could reasonably be expected to want their information shared with a class action plaintiff that may ultimately provide them recovery. (Belaire-West, 149 Cal.App.4th at p. 561.)

The Court also found that the balance of opposing interests also supported the disclosure of class member names and contact information, noting that Belaire-West’s current and former employees were potential percipient witnesses to the employment and wage practices at issue, and that compared to Pioneer, the balance of opposing interests tilted even more in the plaintiff’s favor because the interest at stake was a fundamental public policy underlying California’s employment laws. (Id. at p. 562.)

Today the type of opt-out notice suggested by Pioneer and adopted in Belaire-West is commonly referred to as a “Belaire-West notice,” or even more simply, a “Belaire notice.” Thus, if defendant objects on privacy grounds, plaintiff’s counsel can simply recommend the use of a Belaire-West notice to alieve those concerns and cite the applicable law as set forth above.

For larger class actions with tens of thousands of class members it often makes sense to agree that defendant only need to produce a limited sample of names and contact information, such as 10 percent or 20 percent of the entire class arranged alphabetically by first name. This will help overcome any overbroad or burdensome objections, and for all practical purposes, will save time and money since expensing the cost to send Belaire-West notices to tens of thousands of people who cannot possibly all be contacted makes little sense anyway.

Williams: A recent caveat for representative actions

There is a recent caveat for representative actions  under the Private Attorney General Act of 2006: Williams v. Superior Court (Marshalls of CA, LLC).

In Iskanian v. CLS Transportation Los Angeles (2014) 59 Cal.4th 348, the California Supreme Court upheld the right of aggrieved California employees to bring representative actions under PAGA notwithstanding the inclusion of a waiver of representative actions in an otherwise enforceable arbitration agreement. This decision sparked a trend for litigators to file representative actions under the Private Attorney General Act of 2006, Cal. Labor Code section 2698, et seq. (“PAGA”), instead of class actions in order to avoid the pendency of class-action waivers. Although plaintiffs in representative actions brought under PAGA do not need to meet the requirements for class certification, defendants often argue that the existence of too many individualized issues will make a PAGA representative action unmanageable. Thus, plaintiffs still have a compelling reason to collect the names and contact information of other “aggrieved employees” that were subject to the same employer policies so they can formulate a manageable trial plan to determine who is entitled to PAGA penalties.

However, in a recent Court of Appeal decision, Williams v. Superior Court (Marshalls of CA, LLC) (2015) 236 Cal.App.4th 1151, the Second Appellate District took a dramatic turn from the precedent established by Pioneer and Belaire-West when it upheld a lower court order limiting a plaintiff’s request in a PAGA-only action for the names and contact information of other non-exempt employees throughout the state of California to only those employed at the plaintiff’s work location. The Court reasoned that the need for statewide discovery early on in the proceedings, before the plaintiff had been deposed, and before the plaintiff had shown a knowledge of the practices at other stores or any fact that would support a uniform statewide policy beyond the allegations in the plaintiff’s complaint, was premature. (Id. at 1157.) In balancing the opposing interests, the court held the privacy interests of the defendant’s employees outweighed the plaintiff’s need to discover their identity, noting at that point in the litigation the plaintiff’s need for the discovery sought was “practically non-existent.” (Id. at 1158.)

How lower courts will interpret Williams remains to be seen, but a petition to have the decision depublished is already underway. Although the decision appears to be limited to PAGA-only actions, defendants will surely attempt to extend the court’s reasoning to class actions, so as to prevent plaintiffs from obtaining putative class member names and contact information before having established that any alleged unlawful practices or policies are part of a uniform statewide policy. Of course, this creates a proverbial Catch-22 for a plaintiff relying heavily on declaration testimony of putative class members to support a uniform statewide policy. For the time being, the impact of this decision will undoubtedly muddy the waters for plaintiffs in wage and hour class actions against defendants with several locations, which may limit the effectiveness of the meet and confer process and make the filing of a motion to compel even more likely in those particular cases.

Opt-out notice may not be necessary in federal court

In federal court it is more commonplace for district courts to compel the production of class members’ names and contact information without the requirement of an opt-out notice, finding that a protective order or lesser reasonable limitations are sufficient to protect putative class members’ privacy interests. (See e.g. Alvarez v. Hyatt Regency Long Beach, (C.D. Cal., Sept. 21, 2010) 2010 WL 9505289, at *2-3; Benedict v. Hewlett-Packard Co., (N.D. Cal., June 25, 2013) 2013 WL 3215186, at *2-3; Hernandez v. Best Buy Co., (S.D. Cal., Oct. 15, 2014) 2014 WL 5306888, at *9; Salgado v. O’Lakes, (E.D. Cal., Dec. 18, 2014) 2014 WL 7272784, at *12). However, be careful as some courts may require a plaintiff to first make a prima facie showing that the class certification requirements of Rule 23 of the Federal Rules of Civil Procedure are met or that discovery is likely to substantiate the class allegations before allowing statewide discovery beyond a plaintiff’s own work location. (See Mantolete v. Bolger, (9th Cir. 1985) 767 F.2d 1416, 1424, citing Doninger v. Pacific Northwest Bell, Inc., (9th Cir. 1977) 564 F.2d 1304, 1313; cf Wellens v. Daiichi Sankyo Inc. (N.D. Cal., Mar. 5, 2014) 2014 WL 969692, at *2).

Step 4: Mail Belaire-West opt-out notices to putative class members

Once class counsel has obtained the right to putative class member contact information subject to a Belaire-West opt-out notice, whether through agreement or by court order, the next step is to allow putative class members the opportunity to opt-out of having their contact information shared with class counsel by mailing the opt-out notice. Depending on the size of the class, or if only a sample is provided, the number of opt-out notices being mailed, it may be practical for the parties to agree to use a third-party administrator for the mailing of the Belaire-West opt-out notice and the collection of any opt-out forms. Although this is an added expense to the litigation that is often shared by plaintiff’s counsel, using a third-party administrator will ensure the notices are handled by a neutral party and will streamline the process so class member contact information can be provided in weeks instead of months.

A typical Belaire-West opt-out notice is usually pretty straightforward. The putative class members receive a one or two page letter that provides a summary of the litigation, that class counsel has requested the disclosure of certain contact information as part of their case investigation, that any information provided will be kept confidential and used only for purposes of the lawsuit, and that the instant notice is being provided to allow them the opportunity to opt out of having their information disclosed. The opt-out notice will then provide a deadline for class members to opt out by simply return-mailing a prepaid postcard or form by the deadline. For plaintiff’s counsel, a shorter opt-out deadline is always preferable, whereas defendants will argue for a longer deadline to further delay providing plaintiff the information and to increase the potential number of opt-outs.

Summary: Due diligence pays off

Obtaining the names and contact information for class members can be a laborious process, but doing the due diligence usually pays off in the end and may prove to be a crucial fight that can make or break a case. Talking to putative class members and learning about their experiences can provide necessary testimony to support a motion for class certification and can potentially uncover new violations and claims not originally alleged. Contacting class members can also prove fruitful down the road, as the more informed they become about the case, the more likely they are to participate in a settlement that requires that they opt in or submit a claim form. Thus, it is highly recommended to have a game plan to obtain putative class member contact information early on and to then be consistent and pressing throughout the discovery process. The sooner contact information can be obtained, the more time there will be to contact putative class members before plaintiff’s motion for class certification deadline. Remember the defendant has a head start, so right from the beginning there is catching up to do in order to level the playing field.