Opinion ID: 344479
Heading Depth: 2
Heading Rank: 2

Heading: Compliance with the Reasonable Effort Standard

Text: 28 Nissan U.S.A. made its noncomputerized dealer sales records, including the RDR cards, available to plaintiffs for inspection and copying. In response to plaintiffs' motion for an order requiring Nissan U.S.A. to search the RDR cards and develop a complete list of class members, the district court ordered the defendants to prepare a computer printout of current, registered Datsun owners. 29 On appeal plaintiffs argue that defendants should be required at their own expense to supply the names and addresses of the class members citing several decisions in which similar orders have been made. 13 They contend somewhat obliquely that this requirement is necessary to comply with due process standards and is wholly consistent with the Supreme Court's determination in Eisen v. Carlisle & Jacquelin, 417 U.S. at 177, 94 S.Ct. at 2151, that the names and addresses of Eisen's 2,250,000 class members were easily ascertainable. Finally, they assert that since defendants are intimately familiar with the information contained in the RDR cards, having used them in their daily operations, the class information is more readily ascertainable by defendants. 30 Plaintiff's suggestion that procedural due process requires that defendants at their expense furnish plaintiffs with a list of the absentee class members' names and addresses borders on the frivolous. We reject this argument. See Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 70 S.Ct. 652, 94 L.Ed. 865 (1950). Eisen v. Carlisle & Jacquelin, 417 U.S. at 177-79, 94 S.Ct. at 2152-53, suggests the appropriate method of resolving this issue. Upon the remand of Eisen II from the Second Circuit, the district court found that Eisen's large class was identifiable through reasonable effort. 52 F.R.D. 253, 257-58 (1971). After conducting a preliminary hearing on the merits of Eisen's anti-trust and securities claims, the district court found that Eisen was more than likely to prevail and ordered that 90 percent of the costs of notifying absentee class members be imposed upon the defendants. 54 F.R.D. 565, 567 (1972). In affirming the Second Circuit's reversal of this portion of the district court's order, the Supreme Court found that nothing in either the language or history of Rule 23 . . . gives a court any authority to conduct a preliminary inquiry into the merits of a suit in order to determine whether it may be maintained as a class action. 417 U.S. at 177, 94 S.Ct. at 2152. As to the propriety of imposing a portion of the costs of notice upon the Eisen defendants, the Court found that under rule 23, no support whatsoever existed for entering such an order. The usual rule is that a plaintiff must initially bear the cost of notice to the class. . . . Where, as here, the relationship between the parties is truly adversary, the plaintiff must pay for the cost of notice as part of the ordinary burden of financing his own suit. Id. at 178-79, 94 S.Ct. at 2153. 31 Rule 23 is also silent as to which party must be saddled with the time and expense of gathering the names and addresses of absentee class members. Nor does the Advisory Committee's Note to Rule 23, 39 F.R.D. 98 (1966), discuss this matter. 14 Examination of the decisions treating this question reveals that contrary to plaintiffs' suggestion, both plaintiffs and defendants have been ordered to compile information necessary to the identification of absentee class members. 15 Although the district courts' reasons for doing so have not always been articulated, whether one party or the other has been designated appears to have turned on which would have the easier task in gathering the information sought. 32 All but one of the cases cited by plaintiffs are consistent with this rule of reason approach: 16 In Chevalier v. Baird Sav. Ass'n, 72 F.R.D. 140 (E.D.Pa.1976), a combined federal antitrust and Truth-in-Lending action brought by single-dwelling mortgagors against 22 savings and loan associations, the district court characterized the issue of identifying the absentee class members as one pertaining to discovery under the Federal Rules of Civil Procedure. The Chevalier court held that the class members' names and addresses contained in records in the possession of 22 defendant banks were discoverable and (q)uite clearly . . . within the ambit of rules 34 and 26(b) of the Federal Rules of Civil Procedure and ordered the defendants to gather the class information. Id. at 148. 33 We disapprove of the suggestion, however, that the Federal Rules of Civil Procedure 26 through 37, which govern discovery of information relevant to the subject matter (of a) pending action, Fed.R.Civ.Pro. 26(b), provide a proper model for analyzing this problem. While the spirit of those rules and the decisional law developed under them may offer guidance in resolving which party should furnish absentee class members' names and addresses, they should not control the question's final resolution. Rule 23(d) vests the district court, as manager of the class action, with the appropriate authority to enter whatever orders are necessary to the conduct of the action, see Gordon v. Eastern Air Lines, Inc. (In re Air Crash Disaster at Florida Everglades on December 29, 1972 ), 549 F.2d 1006, 1012 n. 8 (5th Cir. 1977); Calhoun v. Cook, 469 F.2d 1067 (5th Cir. 1972), and resort to the discovery rules for the authority to enter such orders is unnecessary. When resolving whether the names and last known addresses of absentee class members are identifiable through reasonable effort, the district court must consider the relative ability of the parties to furnish identification of absentee class members. If those names and addresses are identifiable with reasonable effort, rule 23(c) (2)'s requirement of individual notice to class members is obligatory. The time and expense of gathering their names and addresses is a necessary predicate to providing each with notice of the action's pendency without which the action may not proceed. Eisen v. Carlisle & Jacquelin, 417 U.S. at 179, 94 S.Ct. at 2153. Viewed in this context, it becomes strikingly clear that rather than being controlled by the federal civil discovery rules, identification of absentee class members' names and addresses is part and parcel of rule 23(c) (2)'s mandate that the class members receive the best notice practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort. 34 Opposed to adopting a rule of reason approach to this matter, defendants urge us to hold that under Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 94 S.Ct. 2140 (1974), plaintiffs, in their roles as class representatives, have a fiduciary obligation to their fellow class members to gather at their own expense the absentee class members' names and addresses. See Pearson v. Ecological Science Corp., 522 F.2d 171, 177 (5th Cir. 1975), cert. denied sub nom., Skydell v. Ecological Science Corp., 425 U.S. 912, 96 S.Ct. 1508, 47 L.Ed.2d 762 (1976). We need not reach this question today, for under either approach, plaintiffs would be required to furnish at their own expense the necessary class information. Upon commencing a class action, the class representatives must be prepared to accept the concomitant responsibility of identifying absentee class members as well as paying the costs of their individual notice. See Eisen v. Carlisle & Jacquelin, 417 U.S. at 176-79, 94 S.Ct. at 2152-53; Freedman v. Amalgamated Sugar Co. (In re Sugar Industry Antitrust Litigation ), 73 F.R.D. 322, 359-60 (E.D.Pa.1976). No peculiar circumstances exist which would warrant a departure from this general rule. Here the RDR cards, which are contained in approximately 100 boxes and set forth both the date and state in which each retail purchaser has obtained his or her vehicle, may be examined as readily by the class representatives as defendants. Moreover, as the relation between the parties is truly adversary, Eisen v. Carlisle & Jacquelin, 417 U.S. at 178-79, 94 S.Ct. at 2153, no necessity exists to decide whether defendants must assist plaintiffs in identifying the class members other than to furnish them with the class identification information for their inspection. Accordingly, we hold that plaintiffs are required at their own expense to compile a list of the absentee class members' names and addresses from defendants' RDR cards. 35 We deal exclusively with preliminary expense and examination considerations. At the conclusion of the case, the district court may impose the costs of identifying the class members and notifying them of the suit as it would any other item of costs. 36