ACCESS NOW, INC. v. AMBULATORY SURGERY CENTER GROUP, LTD.

2. The Class Notices Are Defective and Will Reach Only A Minuscule Portion of Class Members

The primary flaw underlying the class notice in these Agreements concerns their limited means of distribution. The class notices violate due process and fail to meet Rule 23’s notice requirements. Because class action litigation under Rule 23 has a preclusive effect on class members -- most of whom are not even aware of the litigation -- both procedural due process and statutory considerations require that notice of a proposed settlement be disseminated to the class prior to final judicial approval. See Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 172-77 (1974); Fed. R. Civ. P. 23(c)(2), 23(e). At a minimum, due process demands that notice must be "reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections." Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950).

Beyond this basic due process standard, the nature and degree of notice required largely depend on the types of claims covered by the settlement and the identity of interests among class members. In class actions where individual interests are stronger and class interests less cohesive -- typically, claims for monetary relief certified under Rule 23(b)(3) -- both Rule 23(c) and due process demand stronger procedural protections for absent class members. See, e.g., Holmes v. Continental Can Co., 706 F.2d at 1155-59. Both due process and Rule 23(c)(2) mandate that absent class members be given both (i) "the best notice practicable under the circumstances, including individual notice to all members that can be identified through reasonable efforts," and (ii) an opportunity to exclude themselves or "opt-out" of the class and lawsuit. Fed R. Civ. P. 23(c)(2); see also Eisen, 417 U.S. at 173-76 (individual notice must be sent to identifiable class members under Rule 23(c)(2) regardless of expense).

Viewed through the lens of these statutory and due process requirements, the Northwest and Largo class notices cannot withstand scrutiny. The release provisions in these Agreements are exceedingly broad, barring class members from litigating not only ADA title III claims arising after the date of the settlement agreement, but also claims for compensatory or punitive damages under state or local accessibility laws. Northwest and Largo Agreements, Section IX.B. As the summary notice of the Agreements advises, class members:

"are deemed to have waived the protection provided by any state statutes or codes with respect to unknown claims at the time of a general release, and the general release in this action will be effective to forever discharge any claims relating to physical, communication, structural and program access barriers, if any, at the Medical Center by a class member whether known or unknown to the class member at the time of the settlement agreement."

(Docket ##132, 133, Exhibit B) (emphasis added). Because the Agreements purport to waive monetary claims, due process requires actual notice and an opportunity to opt out irrespective of whether the class has been conditionally certified. The Class Members were afforded neither of these procedural protections.⁵

Even assuming arguendo that the Agreements’ expansive release provisions do not necessitate these constitutionally-enhanced procedural measures, the class notices are nonetheless defective under the more lenient "reasonableness" standard governing class notice under Rule 23(e). For class actions seeking to compromise claims for injunctive or declaratory relief, federal courts have generally upheld published notices so long as the notices adequately inform interested parties of the pendency of the lawsuit, provide a summary of the agreement’s general terms, and inform parties of their respective rights thereunder. See, e.g., Mendoza v. United States, 623 F.2d 1338, 1350-51 (9th Cir. 1980), cert. denied, 450 U.S. 912 (1981); Allen v. Alabama State Bd. of Educ., 190 F.R.D. 602, 606-07 (M.D. Ala. 2000); Stanley v. Darlington County School Dist., 879 F. Supp. 1341, 1372-73 (D.S.C. 1995), rev’d in part on other grounds, 84 F.3d 707 (4th Cir. 1996).

The means of distribution mandated by these Agreements are too inadequate to be deemed reasonable. By this Court’s Amended Class Order, dated January 8, 2002, the parties’ proposed publication scheme provides that notice need only be published in Access Now’s Inc. newsletter, or be posted on Access Now’s website.⁶  (Docket ## 80, 139). Further, the parties are only required to post a summary notice in one or two public locations in each of the facility or facilities affected by the proposed settlements.

Plaintiffs acknowledge the class is gigantic and the class numbers over ten million individuals.⁷ (Docket # 41.) By contrast, membership in Access Now is approximately 643 persons. See http://www.adaaccessnow.org/. As such, a minuscule percentage of the ten million member class will receive notification of these Settlement Agreements in Access Now’s newsletter. While it is unknown how frequently the members of the disability community visit the Access Now’s website, it is highly unlikely that this web site – or the notices to be posted thereon – will be viewed with sufficient frequency to reasonably apprise class members of the pendency of these Agreements.

Similarly, posting a summary of the settlement terms in one or two public locations at each Settling Defendants’ facilities cannot reasonably apprise the vast number of individuals affected by these Settlement Agreements. There are seven different buildings covered by the Agreements with various floors and suites – merely posting the notice in one or two places in a large hospital will not ensure notification to a large number of current or potential disabled patients and visitors.

In summary, the Agreement’s notice provisions violate class members’ due process rights and fail to meet Rule 23 notice requirements of actual notice and an opportunity to opt-out of the settlement agreement. Moreover, even under the more lenient "reasonableness" standard governing class action notices, the notice is flawed because of the limited distribution.

⁵Even publication of a class notice in the largest circulation newspapers or magazines is rarely a constitutionally acceptable substitute for individual, mailed notice. See, e.g., Eisen, 417 U.S. at 175 ("‘[N]otice by publication ha[s] long been recognized as a poor substitute for actual notice and . . . its justification [is] ‘difficult at best.’") (quoting Schroeder v. City of New York, 371 U.S. 208, 213 (1962)); Mullane, 339 U.S. at 313-15 (holding publication of notice in local newspaper constitutionally insufficient, and noting "[i]t would be idle to pretend that publication alone . . . is a reliable means of acquainting interested parties of the fact that their rights are before the courts").

⁶On January 8, 2002, this Court amended the Class Orders. Pursuant to the Amended Class Order, if Plaintiffs reach future settlement Agreements with multiple Defendants, the parties may aggregate the fairness hearing "to reduce the need for separate hearings." (Docket #139). The parties’ desire to avoid separate hearings on future settlement agreements is yet an other example of how the parties are depriving class members of a fair and full opportunity to present their objections. The parties apparently intend to use these Agreements as a model for the remaining hospital settlements that makes the rejection of them even more critical to the rights of disabled individuals.

⁷In enacting the ADA, Congress found that "some 43,000,000 Americans have one or more physical or mental disabilities, and this number is increasing..." 42 U.S.C. § 12102.