Toledo Fair Housing Center v. Nationwide Mutual Insurance

704 N.E.2d 648, 94 Ohio Misc. 2d 127, 1996 Ohio Misc. LEXIS 115

Opinion

FREDERICK H. McDonald, Judge.

Pursuant to the court’s judgment entry of January 17, 1996, this case is now before the court on plaintiffs’ proposed plan for identification of and notice to class members. Upon consideration of the written and oral arguments of counsel and the applicable law, I find that the plaintiffs’ proposed plan should be modified and notice should be given to class members as outlined below.

I

The facts surrounding this class action lawsuit were fully set out in the January 17, 1996 opinion and judgment entry. 94 Ohio Misc.2d 17, 703 N.E.2d 340. In that opinion and judgment entry, the class was conditionally certified under Civ.R. 23(B)(2) and (B)(3), and the plaintiffs were ordered to file a proposed notice for identifying class members and for notifying them of the pendency of this action. Originally, the plaintiffs proposed identifying and sending individual mail notice to (1) all current owners of properties in the subject census tracts and (2) all previous owners of properties in the subject census tracts (provided that the previous owner owned the property during the relevant time period). The plaintiffs expected to receive the names and addresses from the Lucas County Auditor’s Office. After learning that they could receive only the names (and not the addresses) for only one immediate past owner, the plaintiffs changed their proposed plan to give mail notice to only the current owners of property in the subject census tracts¹; all other class members would receive publication notice.² Defendants Nationwide Mutual Insurance Company and Nationwide Mutual Fire Insurance Company (collectively “Nationwide”) object to this proposed plan on the grounds that the plan violates due process and the requirements of Civ.R. 23(C)(2).

II

Civ.R. 23(C)(2) provides:

“In any class action maintained under subdivision (B)(3), the court shall direct to the members of the class the best notice practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort.”

Ill

The first issue is whether the plaintiffs’ proposed plan for identifying and notifying class members is adequate. According to the United States Supreme Court:

“An elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice 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. Cent. Hanover Trust Co. (1950), 339 U.S. 306, 314, 70 S.Ct. 652, 657, 94 L.Ed. 865, 873.

If the notice given to absent class members is reasonable under the circumstances, those class members will be bound by a judgment even if they do not receive individual notice. Carlough v. Amchem Products, Inc. (E.D.Pa.1993), 158 F.R.D. 314, 325. However, individual notice is required for those class members whose names and addresses can be determined by reasonable effort. Eisen v. Carlisle & Jacquelin (1974), 417 U.S. 156, 175, 94 S.Ct. 2140, 2151, 40 L.Ed.2d 732, 747. For those class members whose names and addresses cannot be identified with reasonable effort, notice by publication is sufficient. Mullane, 339 U.S. at 317, 70 S.Ct. at 658-659, 94 L.Ed. at 875. In determining whether the effort to provide individual notice is “reasonable,” the court should consider the anticipated results and the costs involved. In re Nissan Motor Corp. Antitrust Litigation (1977), 552 F.2d 1088, 1099.³ According to the court in Carlough, “Rule 23 does not require the parties to exhaust every conceivable method of identifying the individual class members.” (Emphasis in original.) Carlough, 158 F.R.D. at 325.

The parties disagree about the amount of effort that is “reasonable.” The plaintiffs contend that the law requires them to send mail notice only to those whose name and address are known or can be ascertained with reasonable effort; it does not require them to do two separate searches for names and addresses. Nationwide, on the other hand, contends that the plaintiffs’ proposal to send individual notice only to current owners violates Civ.R. 23 and due process requirements. According to Nationwide, notice by publication is a poor substitute for individual notice, and it is to be used only where individual notice is impracticable. Nationwide contends that the plaintiffs have not made a serious effort to locate class members for the purposes of sending individual notice.

While it is true that plaintiffs in a class action lawsuit need not undertake to locate every class member, see Carlough, 158 F.R.D. at 325, it is apparent from the case law that some effort is required to develop a mailing list of class members to receive individual notice. For example, in Eisen, a securities case, the court held that it was reasonable to require individual notice to 2.2 million class members whose names and addresses could be ascertained by comparing odd-lot securities firms’ records of teletype transactions to- general services brokerage firms’ records of all customers’ names and addresses. Eisen, 417 U.S. at 166, fn. 5, 175, 94 S.Ct. at 2147, fn. 5, 2151, 40 L.Ed.2d at 742, fn. 5, 747. Although the names and addresses were apparently retrievable together, the plaintiffs needed to “dovetail” two lists in order to create a mailing list. Similarly, in Weinberger v. Kendrick (C.A.2, 1983), 698 F.2d 61, certiorari denied (1983), 464 U.S. 818, 104 S.Ct. 77, 78 L.Ed.2d 89, rehearing granted in part and denied in part (1983), Fed.Sec.L.Rptr. (CCH) § 99,074, also a securities case, the names and addresses of the class members who received individual notice were culled from several lists. Id. at 71. Finally, the notice plan that the court approved in Carlough consisted of sending individual notice to more than 9,000 class members, sending letters to more than 50 unions and 1,000 attorneys seeking names and addresses of class members, and using paid and unpaid advertising to seek names and addresses of class members. Carlough, 158 F.R.D. at 320-322, 325.⁴

Based on the case law, I find that Civ.R. 23 requires that the plaintiffs make some effort to create a mailing list of class members to whom individual notice will be sent. It is not enough that the plaintiffs send mail notice only to those whose names and addresses are currently known to them; they must make a reasonable effort to determine the addresses of other class members.

In order to determine whether the plaintiffs could effectively locate the addresses of the immediate past owners of properties in the subject census tracts, the plaintiffs conducted a “test” of one census tract (census tract 8). The plaintiffs used the Ameritech phone book for the Toledo metropolitan area, the Polk city directory, PaceNet (a CD-Rom tool), West’s PeopleFinder (an online service), SelectPhone (a CD-Rom tool), and the records of the Ohio Bureau of Motor Vehicles (“BMV”) and the Lucas County Board of Elections (“board”).

PaceNet proved to be an unreliable tool because its data derives from the Lucas County Auditor’s files and is organized by title ownership and not by residence. Thus, an address provided by PaceNet may be an address for property currently owned by a prior owner, but the prior owner may or may not currently live there. Therefore, if notice was sent to an address retrieved by PaceNet, the notice may actually be received by a prior owner’s tenant instead of the prior owner. West’s PeopleFinder and SelectPhone also proved to be unreliable because both search nationally; a common name might retrieve several addresses, making it impossible to determine which of the many addresses is the current address for any given prior owner.⁵ Problems arose with the BMV and board records as well. Since the BMV records require both a name and a Social Security number to retrieve a mailing address, the plaintiffs deemed the BMV records to be unhelpful. With regard to the board records, a supervisor at the board explained that, though their records contain address changes, people do not always change their addresses with the board when they move. Nevertheless, the plaintiffs experimented with the board’s computer with very limited success.

The. Ameritech phone book and the city directory produced relatively good results, both in terms of quality and quantity. The plaintiffs report that the success rate of each of these tools was approximately twenty-five percent.⁶ Though these methods are relatively time-consuming,⁷ when compared to the cost and the relative success of these tools, they appear to be the best methods for locating addresses of prior owners since 1989. Therefore, I find that, from 1988 to the present, the plaintiffs must use both the Ameritech phone book for the Toledo metropolitan area and the Polk city directory to search for the addresses of the immediate prior owners of the properties in all of the subject census tracts.

With regard to notifying the class members who owned the subject properties prior to 1988, I find that notice by publication is sufficient. Though it may be possible to conduct a manual search of these records, the task would be time-consuming and the results would likely be minimal. Since the Lucas County Auditor’s Office does not retain addresses of prior owners, a manual search would reveal only names, and the plaintiffs would still need to search for addresses. And, as averred by Jeffrey Dahl, the plaintiffs’ expert on class notification, the age of any given list affects the results obtained from it. In other words, as the list of names gets older, the likelihood of finding accurate addresses decreases. For this reason, I find that, comparing the time, cost, and anticipated results, the effort to locate the addresses of prior owners before 1988 is unreasonable. For these class members, notice by publication as proposed by the plaintiffs is sufficient.

JOURNAL ENTRY

It is ordered that the plaintiffs send individual mail notice, in the form set out by Appendix A, by ordinary mail to the following class members:

(1) current owners of property in the subject census tracts;

(2) since 1988, the immediate prior owners of property in the subject census tracts whose name can be ascertained from the Lucas County Auditor’s Office and whose address can be ascertained by using either the Ameritech phone book for the Toledo metropolitan area or the Polk city directory for the city of Toledo.

It is further ordered that notice by publication, in the form set out by Appendix B, be given to all other class members as follows:

(1) by publishing notice once monthly in The Toledo Journal starting with the initial publication on October 15,1996 and ending with a publication on March 15, 1997;

(2) by publishing notice once'monthly in the Sunday edition of The Toledo Blade starting with an initial publication on October 15, 1996 and ending with a publication on March 15, 1997.

It is further ordered that the cost of identifying and notifying class members shall be borne by the plaintiffs pending a final determination of the case on the merits.

Judgment accordingly.

APPENDIX A

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APPENDIX B

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Footnotes

1

. For the time period 1988 to the present, the auditor's office computer can provide the name and address of the current owner of each property in the subject census tracts and the name of the most immediate past owner of each property. Prior to 1988, the information is available only on ledger cards and not by computer. See Affidavit of Tara K. Townsend.

2

. The plaintiffs propose to provide notice to previous owners by publishing in The Toledo Journal and in the Sunday edition of The Toledo Blade once monthly until complete disposition of all pretrial matters.

3

. When faced with the argument that the cost of sending individual notice to 2.25 million class members would be prohibitive, the court in Eisen stated, "There is nothing in Rule 23 to suggest that the notice requirements can be tailored to fit the pocketbooks of particular plaintiffs.” Eisen, 417 U.S. at 176, 94 S.Ct. at 2152, 40 L.Ed.2d at 748. Recognizing this comment, the court in Nissan stated:

"Obviously, the word 'reasonable' cannot be ignored. In every case, reasonableness is a function of anticipated results, costs, and amount involved. A burdensome search through records that may prove not to contain any of the information sought clearly should not be required. On the other hand, a search, even though calculated to reveal partial information or identification, may be omitted only if its cost will exceed the anticipated benefits.” Nissan, 552 F.2d at 1099.

Thus, it appears that while cost alone will not dictate who receives individual notice, it is one factor that may be considered when determining whether an effort to locate absent class members is ‘‘reasonable" within the meaning of Civ.R. 23(C)(2).

4

. When compared to other industrial injury cases where little or no effort was made to contact future claimants who had not yet manifested an injury, the court in Carlough described the plaintiffs’ notice plan as "more than adequate.” Carlough, 158 F.R.D. at 326.

5

. The task of finding addresses for prior owners is made more difficult by the fact that the auditor's office cannot provide Social Security numbers.

6

. The success rates may actually be higher. Though the numbers vary in the record, it appears that in census tract 8 there are approximately 180 prior owners for whom the plaintiffs have names but no addresses: 310 (the original total on the prior owner list) less those who are still current owners (the title changed due to death or divorce), less those who are current owners of other property in census tract 8, less those whose names appear more than once on the prior owner list because they sold more than one property in census tract 8. See Plaintiffs' Brief Regarding Class Notice Requirements, pg. 11, fn. 5; Affidavit of Tonya Huepenbecker (attached to Plaintiffs' Brief Regarding Class Notice Requirements); Plaintiffs’ May 2, 1996 letter regarding status of class member identification process. By using the Ameritech phone book the plaintiffs found 85 addresses, and they found 70 by using the city directory. Comparing these numbers to the total number of unaddressed prior owners (approximately 180), the percentages are forty-seven percent for the phone book (85/180) and thirty-nine percent for the city directory (70/180). The plaintiffs reached their figures by comparing the number of addresses discovered from these sources to the original number of unaddressed prior owners (310).

7

. According to Exhibit 1 to Huepenbecker’s affidavit, she spent 16.8 hours retrieving 85 "good” addresses when using the phone book (approximately 12 minutes for each address) and 4 hours retrieving 70 "good" addresses when using the city directory (approximately 3 minutes for each address).