Better Late Than Never: Notice and Opt Out at the Settlement Stage of Class Actions
George Rutherglen
Whether the Due Process Clause requires individual notice to class action members has not yet been resolved by the Supreme Court. Under the literal terms of Rule 23, however, courts currently require early individual notice in (b)(3) class actions, while leaving notice to the discretion of the trial court in (b)(1) and (b)(2) actions. In this Article, Professor Rutherglen questions the difference in procedural protections afforded to (b)(3) class members, on the one hand, and (b)(1) and (b)(2) class members, on the other. Arguing that effective notice need not meet the rigorous standard of early individual notice in (b)(3) class actions, Professor Rutherglen suggests a new rule that would give class members the right to receive individual notice later in the proceeding, and, at least for (b)(3) class members, the right to opt out at the settlement stage. Such a rule would better protect class members because it would provide notice at a time when information about the merits of the claim is more readily available. It also would empower class members to register their dissatisfaction with the performance of the class attorney by opting out. Where previous scholarship emphasizes the procedural dimensions of notice and the right to opt out under the Due Process Clause, Professor Rutherglen emphasizes the substantive aspects of the right to opt out. He stresses the importance of making substantive changes in the law that would provide for better management of both large class actions and related individual claims.
