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Gulf Oil Co Vs Bernard - Citation 104978 - Court Judgment | LegalCrystal
Save as PDF Add a Tag Add a Note Semantics Visualize Gulf Oil Co. Vs. Bernard - Court Judgment	LegalCrystal Citationlegalcrystal.com/104978CourtUS Supreme CourtDecided OnJun-01-1981Case Number452 U.S. 89AppellantGulf Oil Co.RespondentBernardExcerpt:
gulf oil co. v. bernard - 452 u.s. 89 (1981)
petitioner gulf oil co. and the equal employment opportunity commission entered into a conciliation agreement involving alleged discrimination against black and female employees at one of gulf's refineries. under this agreement, gulf undertook to offer backpay to alleged victims of discrimination and began to send notices to employees eligible for backpay, stating the amount available in return for execution of a full release of all.....Judgment:
The District Court in imposing the order in question abused its discretion under the Federal Rules of Civil Procedure. Pp.
it more difficult for respondents to obtain information about the merits of the case from the persons they sought to represent. Pp.
(b) Because of these potential problems, such an order should be based on a clear record and specific findings reflecting a weighing of the need for a limitation and the potential interference with the parties' rights. Only such a determination can ensure that the court is furthering, rather than hindering, the policies embodied in the Federal Rules, especially Rule 23. Moreover, such a weighing should result in a carefully drawn order that limits speech as little as possible, consistent with the parties' rights. Pp.
452 U. S. 101
(c) Here, there is no indication of a careful weighing of competing factors, and the record discloses no grounds on which the District Court could have determined that it was necessary or appropriate to impose the order. The fact that the order involved serious restraints on expression, at a minimum, counsels caution on the District Court's part in drafting the order and attention to whether the restraint was justified by a likelihood of serious abuses. Pp.
452 U. S. 102
(d) The mere possibility of abuses in class action litigation does not justify routine adoption of a communications ban that interferes with the formation of a class or the prosecution of a class action in accordance with the Federal Rules. And certainly there was no justification for adopting the form of order recommended by the Manual for Complex Litigation, in the absence of a clear record and specific findings of need. P.
452 U. S. 104
In April, 1976, Gulf and the Equal Employment Opportunity Commission (EEOC) entered into a conciliation agreement involving alleged discrimination against black and female employees at the Port Arthur refinery. Gulf agreed to cease various allegedly discriminatory practices, to undertake an affirmative action program covering hiring and promotion, and to offer backpay to alleged victims of discrimination based on a set formula. Gulf began to send notices to the 643 employees eligible for backpay, stating the exact amount available to each person in return for execution within 30 days of a full release of all discrimination claims dating from the relevant time period. [
agreement, on May 18, 1976, respondents filed this class action in the United States District Court for the Eastern District of Texas, on behalf of all black present and former employees, and rejected applicants for employment, at the refinery. [
] They alleged racial discrimination in employment and sought injunctive, declaratory, and monetary relief, based on Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e
and the Civil Rights Act of 1866, 42 U.S.C. § 1981. The defendants named were Gulf and Local 4-23 of the Oil, Chemical, and Atomic Workers International Union. Plaintiffs' counsel included three lawyers from the NAACP Legal Defense and Education Fund. [
] Through this lawsuit, the named plaintiffs sought to vindicate the alleged rights of many of the employees who were receiving settlement offers from Gulf under the conciliation agreement.
On June 8, Gulf moved for a modification of the order that would allow it to continue mailings to class members, soliciting releases in exchange for the backpay amounts established under the conciliation agreement. Respondents filed a brief in opposition, arguing that the ban on their communications with class members violated the First Amendment. On June 11, the court heard oral argument, but took no evidence. Gulf then filed a supplemental memorandum proposing that the court adopt the language of "Sample Pretrial Order No. 15" in the Manual for Complex Litigation App. § 1.41. [
] Respondents replied with another memorandum accompanied by sworn affidavits of three lawyers. In these affidavits, counsel stated that communications with class members
On June 22, another District Judge issued a modified order adopting Gulf's proposal. [
] This order imposed a complete
"It is Plaintiff's [
] contention that any such provisions as hereinbefore stated that limit communication with potential class members are constitutionally invalid, citing
Rodgers v. United States Steel Corporation,
508 F.2d 152 (3rd Cir.1975),
420 U.S. 969 (1975). This Court finds that the
case is inapplicable, and that this order comports with the requisites set out in the
. . . which specifically exempts constitutionally protected communication when the substance of such communication is filed with the Court."
On July 6, pursuant to the court's order, respondents submitted for court approval a proposed leaflet to be sent to the class members. [
] This notice urged the class to talk to a lawyer
before signing the releases sent by Gulf. It contained the names and addresses of respondents' counsel and referred to this case. Respondents argued that the notice was constitutionally protected and necessary to the conduct of the lawsuit. Gulf opposed the motion. The court waited until August 10 to rule on this motion. On that date, 2 days after the expiration of the 45-day deadline established by the court for acceptance of the Gulf offer by class members, [
] the court denied the motion in a one-sentence order containing no explanation. As a result, the named plaintiffs and their counsel were prevented from undertaking any communication with the class members prior to the deadline.
On appeal from a subsequent final order, [
] respondents argued that the limitations on communications imposed by the District Court were beyond the power granted the court in Federal Rule of Civil Procedure 23(d) and were unconstitutional under the First Amendment. A divided panel of the United States Court of Appeals for the Fifth Circuit affirmed the District Court. 596 F.2d 1249 (1979).
at 1259-1261. Turning to respondents' First Amendment argument, the majority held that the order was not a prior restraint, because it exempted unapproved communications whenever the parties or their counsel asserted a constitutional privilege in good faith. The court also found no serious "chill" of protected speech.
at 1261-1262.
Judge Godbold wrote a dissenting opinion arguing that the order limiting communications was not "appropriate" within the meaning of Federal Rule of Civil Procedure 23(d), because the court did not make any finding of actual or imminent abuse. He reasoned that Gulf's unsworn allegations of misconduct could not justify this order, and that a court could not impose such a limitation routinely in all class actions.
at 1267-1268. He added that it was improper in this context for the District Court to encourage compliance with the conciliation agreement through such an order.
at 1269-1270. Judge Godbold also found that the order violated respondents' First Amendment rights.
at 1270-1275.
The Fifth Circuit granted a rehearing en banc, and reversed the panel decision concerning the order limiting communications. 619 F.2d 459 (1980). A majority opinion joined by 13 judges held that the order was an unconstitutional prior restraint on expression accorded First Amendment protection. [
] The court held that there was no sufficient particularized showing of need to justify such a restraint, that the restraint was overbroad, and that it was not accompanied by the requisite procedural safeguards.
at 466-478. Eight
judges concurred specially on the theory that it was unnecessary to reach constitutional issues, because the order was not based on adequate findings, and therefore was not "appropriate" under Federal Rule of Civil Procedure 23(d).
at 478, 481. One judge would have affirmed the District Court.
"(d) ORDERS IN CONDUCT OF ACTIONS. In the conduct of actions to which this rule applies, the court may make appropriate orders: . . . (3) imposing conditions on the representative parties or on intervenors . . . [and] (5) dealing with similar procedural matters. [
As the concurring judges below recognized, 619 F.2d at 478, 481, prior to reaching any constitutional questions, federal courts must consider nonconstitutional grounds for decision.
(1936) (Brandeis, J., concurring). As a result, in this case, we first consider the authority of district courts under the Federal Rules to impose sweeping limitations on communications by named plaintiffs and their counsel to prospective class members.
More specifically, the question for decision is whether the limiting order entered in this case is consistent with the general policies embodied in Rule 23, which governs class actions in federal court. Class actions serve an important function in our system of civil justice. [
] They present, however,
opportunities for abuse as well as problems for courts and counsel in the management of cases. [
] Because of the potential for abuse, a district court has both the duty and the broad authority to exercise control over a class action and to enter appropriate orders governing the conduct of counsel and parties. But this discretion is not unlimited, and indeed is bounded by the relevant provisions of the Federal Rules.
(1974). Moreover, petitioners concede, as they must, that
exercises of this discretion are subject to appellate review. Brief for Petitioners 21, n. 15;
see Eisen, supra; Oppenheimer Fund, Inc. v. Sanders,
437 U. S. 340
437 U. S. 359
In the present case, we are faced with the unquestionable assertion by respondents that the order created at least potential difficulties for them as they sought to vindicate the legal rights of a class of employees. [
] The order interfered with their efforts to inform potential class members of the existence of this lawsuit, and may have been particularly injurious -- not only to respondents but to the class as a whole -- because the employees at that time were being pressed to decide whether to accept a backpay offer from Gulf that required them to sign a full release of all liability for discriminatory acts. [
] In addition, the order made it more difficult for respondents, as the class representatives, to obtain information about the merits of the case from the persons they sought to represent.
Because of these potential problems, an order limiting communications between parties and potential class members should be based on a clear record and specific findings that reflect a weighing of 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. As the court stated in
Coles v. Marsh,
560 F.2d 186, 189 (CA3),
434 U.S. 985 (1977):
In the present case, one looks in vain for any indication of a careful weighing of competing factors. Indeed, in this respect, the District Court failed to provide any record useful for appellate review. The court made neither factual findings nor legal arguments supporting the need for this sweeping restraint order. Instead, the court adopted
the order suggested by the Manual for Complex Litigation -- on
The result was an order requiring prior judicial approval of all communications, with the exception of cases where respondents chose to assert a constitutional right. Even then, respondents were required to preserve all communications for submission to the court within five days. [
] The scope of this order is perhaps best illustrated by the fact that the court refused to permit mailing of the one notice respondents submitted for approval.
452 U. S. 96
-97. This notice was intended to encourage employees to rely on the class action for relief, rather than accepting Gulf's offer. The court identified nothing in this notice that it thought was improper and indeed gave no reasons for its negative ruling.
We conclude that the imposition of the order was an abuse of discretion. The record reveals no grounds on which the District Court could have determined that it was necessary or appropriate to impose this order. [
] Although we do not
We recognize the possibility of abuses in class action litigation, and agree with petitioners that such abuses may implicate communications with potential class members. [
] But the mere possibility of abuses does not justify routine adoption of a communications ban that interferes with the formation of a class or the prosecution of a class action in accordance with the Rules. There certainly is no justification for adopting verbatim the form of order recommended by the Manual for Complex Litigation, in the absence of a clear record and specific findings of need. Other, less burdensome remedies may be appropriate. [
] Indeed, in many cases, there will be no problem requiring remedies at all.
In the present case, for the reasons stated above, we hold that the District Court abused its discretion. [
] Accordingly, the judgment below is affirmed.
The letter stated that, "[b]ecause this offer is personal in nature, Gulf asks that you not discuss it with others." It added, however, that those who did not understand the offer could request that a company official arrange an interview with a Government representative. Brief for United States
This section of the order was drawn word-for-word from the Manual for Complex Litigation App. § 1.41. The order then went on to authorize Gulf to continue with the settlement process under the terms of the conciliation agreement, and to direct the Clerk of Court to send the notice described in
A paragraph near the end of the order then reiterated the proscription on communications:
ATTENTION BLACK WORKERS OF GULF OIL"
"These lawyers represent six of your fellow workers in a lawsuit titled
Bernard v. Gulf Oil Co.,
which was filed in Beaumont Federal Court on behalf of all of you. This suit seeks to correct fully the alleged discriminatory practices of Gulf."
This order had effected a substantial change in the procedure mandated by the conciliation agreement, which provided that "failure on the part of any member to respond within thirty days shall be interpreted as
of back pay" (emphasis added). App. 59.
In holding that the order restricted protected speech, the court relied both on cases involving essentially political litigation,
(1978), and on cases that may be closer to the present case, involving collective efforts to gain economic benefits accorded a specific group of persons under federal law,
Railroad Trainmen v. Virginia State Bar,
Deposit Guaranty Nat. Bank v. Roper,
445 U. S. 326
445 U. S. 338
(1980). Rule 23 expresses
Rodgers v. United States Steel Corp.,
508 F.2d 152, 163 (CA3),
423 U.S. 832 (1975).
Although traditional concerns about "stirring up" litigation remain relevant in the class action context,
such concerns were particularly misplaced here. Respondents were represented by lawyers from the NAACP Legal Defense and Education Fund -- a nonprofit organization dedicated to the vindication of the legal rights of blacks and other citizens.
See In re Primus, supra,
436 U. S. 422
-431 (distinguishing, with respect to First Amendment protections, between solicitation of clients intended to advance political objectives and solicitation of clients for pecuniary gain).
The class action problems that have emerged since Rule 23 took its present form in 1966 have provoked a considerable amount of comment and discussion.
Manual for Complex Litigation; Developments in the Law: Class Actions, 89 Harv.L.Rev. 1318 (1976); Miller, Problems of Administering Judicial Relief in Class Actions under Federal Rule 23 (b) (3), 54 F.R.D. 501 (1972).
The potential abuses associated with communications to class members are described in
433 F.Supp. 782 (ED La.1977). That court referred,
at 790. The court added that
at 790-791.
Manual for Complex Litigation App. § 1.41.
Comment, Judicial Screening of Class Action Communications, 55 N.Y.U.L.Rev. 671, 699-704 (1980); Note, 88 Harv.L.Rev. 1911, 1917-1920 (1975).
In Title VII, Congress expressed a preference for voluntary settlements of disputes through the conciliation process.
E.g., Alexander v. Gardner-Denver Co.,
(1974). But, as the en banc majority stated, it is not appropriate to promote such a policy by restricting information relevant to the employee's choice:
we do not reach the question of what requirements the First Amendment may impose in this context. Full consideration of the constitutional issue should await a case with a fully developed record concerning possible abuses of the class action device.
Cf. In re Halkin,
194 U.S.App.D.C. 257, 274, 598 F.2d 176, 193 (1979) ("To establish
good cause' for a protective order under [Federal Rule of Civil Procedure] 26 (c), `[t]he courts have insisted on a particular and specific demonstration of fact, as distinguished from stereotyped and conclusory statements'") (quoting 8 C. Wright & A. Miller, Federal Practice and Procedure § 2035, p. 265 (1970)).
The order contains a serious ambiguity concerning the response that the court could make if it found no merit in respondents' assertion of a constitutional right with respect to a particular communication. Arguably, this "constitutional" exception was not a realistic option for respondents, because they could be exposed to the risk of a contempt citation if the court determined that a communication submitted after-the-fact was not constitutionally protected.
619 F.2d at 471 (referring to "the omissions and ambiguities of the order and possible differing constructions as to when, if at all, one is protected against contempt"). At the very least, parties or their counsel would be required to defend their good faith, at the risk of a contempt citation. Because of this fact, and the practical difficulties of the filing requirement,
at 470-471, this exception for constitutionally protected speech did little to narrow the scope of the limitation on speech imposed by the court.
at 466 (footnote omitted).
In the conduct of a case, a court often finds it necessary to restrict the free expression of participants, including counsel, witnesses, and jurors. Our decision regarding the need for careful analysis of the particular circumstances is limited to the situation before us -- involving a broad restraint on communication with class members. We also note that the rules of ethics properly impose restraints on some forms of expression.
ABA Code of Professional Responsibility, DR 7-104 (1980).