Eisen v. Carlisle & Jacquelin

Brief Fact Summary.

Plaintiffs, odd-lot traders, desire to be certified as a class and defendant challenges their certification.

Synopsis of Rule of Law.

Under FRCP 23(c)(2) individual notice must be issued to every identifiable class member whose names and addresses may be ascertained through a reasonable effort, and the plaintiff must initially bear the cost of providing this notice.

Facts.

Eisen on behalf of himself and other odd-lot traders brought suit against Defendants Carlisle & Jacquelin and DeCoppet & Doremus who handled 99% of odd-lot trading and were charging really high fees. Plaintiffs accused Defendants of having unlawful monopoly power in violation of the Sherman Act. Defendant challenged the class certification under FRCP 23 and the district court granted their motion to decertify the class. On appeal, the court of appeals issued two rulings: (1) the district court’s decision was final and properly appealable and (2) the class may be able to be properly certified. Defendant appealed again. The court appeals then reversed the district court’s determination and denied the class certification. The Supreme Court of the United States granted certiorari.

Issue.

Under FRCP 23(c)(2) must individual notice be issued to every identifiable class member whose name and addresses may be ascertained through a reasonable effort and must the plaintiff initially bear the cost of providing this notice to the class?

Held.

Yes, under FRCP 23(c)(2) individual notice must be issued to every identifiable class member whose name and address may be ascertained through a reasonable effort and the plaintiff must initially bear the cost of providing this noticeto the class.

Dissent.

Justice Justice Doulgas with Justices Brennan and Justice Marshall dissenting in part

The majority should have given more direction to the district court to follow on remand. Specifically that many of Plaintiffs’ problems can be solved with subclasses.

Discussion.

1. FRCP 23(c)(2) states that for any class certified under FRCP 23(b)(3) the court has to give class members notice that is practicable under the circumstances, including individual notice to any member that can be identified through reasonable effort.
2. This notice is a requirement of due process.
3. Mullane v. Central Hanover Bank & Trust Co. mandates notice be reasonably calculated to inform potential class members of pending litigation and give them an opportunity to opt in or out.
4. Therefore publication, when the names and addresses of potential class members is known, is not sufficient.
5. Plaintiff Eisen argues that he should be exempted from the notice requirement because the class is extremely large and notifying all members would be expensive.
6. Plaintiff also argues that the downside of not providing notice to a member is low because the potential recovery is low and class members will therefore be inclined not to opt out.
7. However, regardless of how expensive or burdensome it is to provide notice, FRCP 23 requires it.
8. The district court’s finding that Defendants must pay 90% of the notice costs was inappropriate because the court improperly evaluated the merits of the action during the same proceedings in which it was making a determination on the sufficiency of the class which it should not have done. It should have only addressed whether FRCP 23 was satisfied.
9. Judgement is vacated and remanded.