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Burns v. Elrod

March 15, 1985

JOHN BURNS, ET AL., PLAINTIFFS , AND MARY J. FONTANA, PETER G. POLMEN, AND MICHAEL MACINO, PETITIONERS-APPELLANTS ,
v.
RICHARD E. ELROD, ET AL., DEFENDANTS-APPELLEES



Appeals from the United States District Court for the Northern District of Illinois, Eastern Division, No. 71 C 607, Joel M. Flaum, Judge.

Author: Pell

Before CUDAHY and ESCHBACH, Circuit Judges, and PELL, Senior Circuit Judge.

PELL, Senior Circuit Judge. Petitioners Mary J. Fontana, Peter G. Polmen, and Michael A. Macino appeal from the denial of their petitions to file late claim applications to participate in the settlement of a class action. Former employees of the Office of the Sheriff of Cook County (the "Sherrif's Office") initiated the class action on March 10, 1971, seeking injunctive and declaratory relief, back pay, and reinstatement. Plaintiffs complained that the Sheriff's Office had discharged them for political reasons in violation of the United States Constitution and various civil rights statutes. The district court denied their request for a preliminary injunction and dismissed the complaint. This court reversed. Burns v. Elrod, 509 F.2d 1133 (7th Cir. 1975), affirmed, 427 U.S. 347, 49 L. Ed. 2d 547, 96 S. Ct. 2673 (1976). On remand from the Supreme Court, the district court permanently enjoined defendants from discharging or threatening to discharge employees for political reasons. The court granted plaintiffs' motion to proceed under Rule 23(b)(2) as a class action. Fed. R. Civ. P. 23(b)(2). Before the case went to trial, the parties reached a tentative settlement calling for 18 months back pay and priority reinstatement for class members. The court entered an order by stipulation of the parties, dated April 22, 1981, requiring defendants to mail notice of the proposed settlement to prospective class members before April 27, 1981. Defendants identified prospective class members by comparing a list of employees who had worked for the Sheriff's Office in December, 1970 with a similar list for December, 1972. The parties considered any employee whose name appeared on the first list, but not the second, a prospective class member.*fn1 This procedure generated approximately 700 names and addresses. The addresses, obtained from old payroll sheets, were over ten years old. Because of the likelihood that many class members had changed their addresses during the ten-year pendency of the case, the order also required the parties to

immediately ascertain any later known address, if any, of each prospective class member who failed to receive the notice when mailed on or before April 27, 1981. By May 14, 1981, the defendants shall cause a second mailing to be made of the notice to each prospective class member who failed to receive the first mailing (on or before April 27, 1981) and for whom a later known address has been ascertained.

Moreover, defendants had to place two extensively detailed display-type advertisements containing information about the proposed settlement in each of the two Chicago daily newspapers. A June 5, 1981 deadline was imposed for filing claim applications.

The first wave of individual notices was mailed and the advertisements were placed in the newspapers. The post office returned over 500 of the 700 mailings as undeliverable, primarily because of incorrect addresses. Defendants failed to take any steps to update the addresses or otherwise locate the 500 prospective class members. Plaintiffs, through their counsel, attempted to contact these prospective class members through a search of Chicago-area telephone directories. Their efforts located 37 prospective class members, 30 of whom expressed an interest in filing claim applications.

Plaintiffs moved to extend the deadline for locating and contacting class members. The district court denied the motion without discussion. Defendants never mailed a second wave of notices. Following a fairness hearing, the court approved the settlement on June 26, 1981.

On May 24, 1982, nearly one year after the filing deadline had passed, two prospective class members petitioned the court to allow them to file late claims. On August 30, 1982, a third claimant filed a petition. All three argued that they never saw the newspaper advertisements and that they failed to receive notice by mail because defendants had supplied incorrect addresses. The district court, exercising its equitable jurisdiction over the distribution of settlement funds, denied defendants' motions to dismiss and allowed the late petitions "since these petitioners did not receive personal notice by mail because of inadvertent error or inaccurate record-keeping. . . ."

On January 25, 1983, Mary J. Fontana, Michael A. Macino, and Peter G. Polmen petitioned to file late claim applications. Petitioners alleged that they failed to receive notice of the settlement agreement by mail or through the newspapers; that in any event, the newspaper advertisements provided inadequate notice under the circumstances; and that plaintiffs and defendants failed to use reasonable and practical methods for locating class members, all in violation of the court's order of April 27, 1981. In particular, petitioners noted that defendants could have obtained their current addresses from the Office of the Secretary of State in Springfield, Illinois (the "Secretary") merely by providing the Secretary with their names and birthdates.*fn2

Defendants moved to deny the petition, arguing that the court's April 27, 1981 order did not require them to approach the Secretary for current addresses and that the court would work a substantial injustice on defendants if it permitted the late claim applications. On May 31, 1983, the court denied petitioners' motion, finding "that the best notice practicable was given to the class through the diligent efforts of counsel to mail individual notices and to serve notice by publication." The court stated that plaintiffs and defendants were not required to exhaust every conceivable method of identifying potential class members, and that "adequate notice was published in newspapers of large circulation," even though "petitioners did not receive notice by mail." Petitioners Fontana and Polmen appealed on June 23, 1983. Petitioner Macino appealed a week later. We dismissed both appeals without prejudice as premature. Petitioners then moved the district court to enter final judgment pursuant to Fed. R. Civ. P. 54(b). The court granted their motion and their appeals, now consolidated, are properly before us.

Petitioners contend that defendants failed to provide them with the notice required by Rule 23 and that subsection (c)(2) provides the standard by which we should measure the adequacy of defendants' efforts. Fed. R. Civ. P. 23(c)(2). That subsection states that class members must receive "the best notice practicable under the circumstances, including individual notice to all members who can be identified through reasonable efforts." Defendants, they argue, failed to meet this high standard merely by placing advertisements in newspapers and by mailing individual notices to 10-year-old addresses and that this failure requires us to allow their late claim applications. Defendants reply that the requirements of subsection (c)(2) do not apply where, as here, plaintiffs have maintained their class action under subsection (b)(2),*fn3 and not subsection (b)(3),*fn4 of Rule 23. They argue that subsection (e), which states that "notice of the proposed dismissal or compromise shall be given to all members of the class in such manner as the court directs," provides the correct -- and more discretionary -- standard for giving notice, and that they have more than met this standard.*fn5

We initially note that, under the circumstances of this case, the standard of notice advanced by defendants -- notice "as the court directs: -- substantially collapses into the "individual notice" standard advocated by petitioners. When the court ordered individual notice (as well as notice by publication), it basically required defendants to do no less than that required by subsection (c)(2). Cf. Eisen v. Carlisle and Jacquelin, 417 U.S. 156, 173-76, 40 L. Ed. 2d 732, 94 S. Ct. 2140 (1974) (subsection (c)(2) requires "that individual notice must be provided to those class members who are identifiable through reasonable effort"). Since the district court did not certify the class under subsection (b)(3), and since it ordered individual notice to class members anyway, we will review the reasonableness of defendants' efforts in light of the standards of subsection (e) (notice "as the court directs").*fn6

While the case is a close one, we find defendants' efforts reasonable. Defendants supplied the names of prospective class members and caused newspapers to publish advertisements containing information about the settlement. While petitioners now suggest that additional avenues of inquiry might have led to the notification of even more class members, Rule 23 does not require defendants to exhaust every conceivable method of identification. Neither does the failure of defendants to send a second mailing to "class members who failed to receive the first mailing . . . and for whom a later known address [had] been ascertained" prove a violation of subsection (e). While defendants could have sent written notice to the 37 class members identified through the search of phone directories, we see no great harm in defendants' omission given that these class members received actual notice by phone.

Petitioners point to Zients v. LaMorte, 459 F.2d 628 (2d Cir. 1972), in support of their contention that defendants failed to comply with subsection (e). In that case, claimants filed late claims to participate in the settlement of a class action. Defendants had mailed individual notices to petitioners' agent, but the agent, which had moved its place of business, apparently never received the mailings. The district court concluded that it lacked discretion to allow the claims, even though defendants did not oppose them. On appeal, the Second Circuit held that the ...


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