Court: Court of Appeals of Arizona; April 25, 1985; Arizona; State Appellate Court
Petitioner A.J. Bayless Markets, Inc. (Bayless) is a defendant in two consolidated class action cases alleging discrimination against female employees regarding promotion and pay practices. The amended complaint seeks monetary damages and injunctive relief. After the class was certified, notice was sent to approximately 3,300 class members, with around 672 notices returned as undeliverable. Following a three-week trial focused on liability, the trial court found that Bayless violated Title VII of the Civil Rights Act of 1964 and the Arizona Civil Rights Act, determining the class was entitled to injunctive relief and presumptively entitled to back pay.
The plaintiffs then moved to approve a notification plan under Rule 23(d)(2) to inform class members about the adjudication of liability and claims process. The proposed plan, developed by media consultants, included notices via television, radio, and newspaper, as well as individual mailings. The media notices would inform past and present female employees of their potential eligibility for back pay due to Bayless's discriminatory practices, emphasizing the need to file claim forms by a deadline. The estimated cost for this media campaign is $34,000.
Bayless opposed the motion, arguing the media notice was overly negative and harmful to its business interests, and requested the court to eliminate mass media from the notice procedure in favor of direct notice methods. Bayless contended that the proposed media plan did not meet the "best notice practicable" standard and suggested that initial notices be sent by first-class mail, allowing 45 days for claim submissions.
Bayless implemented various alternative strategies to provide notice to class members whose original notifications were undeliverable. The methods included preparing an acceptable notice for the Social Security Administration, mailing to the last known addresses with guaranteed forwarding, consulting telephone directories, publishing missing members' names, reviewing public records, and engaging a private investigator. If further notice was deemed necessary after 45 days, it would be published in newspapers with general circulation in the state. Bayless contended that these alternative methods constituted the best practicable notice, especially given the class size, the number of unnotified members, and potential relocations.
The trial court held a two-day hearing focused on the effectiveness of a proposed media notice plan, ultimately approving it. The court concluded that newspaper ads alone were insufficient, but the media plan was well-crafted to reach the relevant class members, and the associated costs were reasonable.
The central issue was whether the trial court abused its discretion by ordering notice via publication without first attempting actual notice through alternative means, particularly given the class's small size and known members. The court found that the trial court had indeed abused its discretion and granted special action relief, recognizing that class members who did not receive notice would lack a remedy through appeal. Bayless argued that the trial court's order violated its due process rights due to the disproportionate cost and impact of the proposed notice compared to its effectiveness. However, the court clarified that the focus should be on the rights of the unnotified class members, noting that a judgment in class actions is binding on all members, with exceptions only for those who opt out after initial notification.
Due process necessitates that courts ensure adequate notice is given to class members regarding the pendency and progress of class actions, as these judgments can significantly affect their substantive rights. The class action procedure, which deviates from the general rule of binding only parties to a lawsuit, requires maximum opportunity for notice, including individual notification when feasible. Counsel for the class bears fiduciary obligations to absent class members, and the district court is responsible for safeguarding their rights through broad administrative and adjudicative powers.
The Greenfield case established that notice by publication does not meet due process standards when individual notices are ascertainable, affirming that individual notice is the "best notice practicable" under Rule 23(c)(2). This principle extends to subsequent notices under Rule 23(d)(2), where compliance with due process remains essential. The court's duty includes ensuring that absent class members are informed of developments that may impact their interests, particularly when prior notifications were inadequately received. Rule 23(d)(2) reinforces this obligation for the fair representation of class members, mandating that notice criteria protect their interests and adhere to due process requirements, especially when known class members have not received initial notifications.
The trial court received evidence indicating that a first-class mailing intended for class members failed to reach at least 672 individuals. Bayless requested an additional 45 days to achieve actual notice to the class members before resorting to notice by publication. The court found that this delay would not prejudice any parties involved and emphasized that successful efforts for actual notice are preferable to publication methods. The trial court's refusal to allow further attempts at actual notice was deemed an abuse of discretion, failing to protect the interests of absent class members. Consequently, the court vacated the trial court's order and remanded the case for additional proceedings based on the results of Bayless' notice efforts. The opinion referenced relevant rules, specifically Rule 23(c)(2), which mandates the best practicable notice to class members, and noted that approximately 200 members had opted out of the class.
