In class actions, unlike typical individual litigation, plaintiffs’ lawyers are often confronted with situations in which they need to find, select, or replace named plaintiffs. When identifying named plaintiffs, class action attorneys must navigate the requirements of both Rule 23 and their ethical duties. In this edition of Class Actions 101, we address ethical and practical questions that a plaintiffs’ lawyer new to class actions may face when identifying proposed class representatives.
Do nationwide rules exist concerning solicitation in the class action context?
It would be nice if a single set of rules governed this topic, but we are not so lucky. Class action attorneys are subject to the same ethical rules as other lawyers, so you must check your state’s ethical rules as well as the rules of any state where your advertisement or solicitation is targeting prospective clients.
Some of the most important ethical rules to keep in mind are your state’s version of the Model Rules of Professional Conduct. Specifically, make sure to examine Rule 7.1 (prohibiting false or misleading communications about an attorney or that attorney’s services), Rule 7.2 (addressing advertising and referrals), and Rule 7.3 (concerning solicitation). As a result of the work of its Ethics 20/20 Commission, the American Bar Association recently updated the Model Rules. See Resolution 105B. The Model Rules now recognize the important role attorney advertising plays in educating the public about legal services, as well as the growing role of the Internet in the public’s search for such information. At the same time, the Model Rules strive to maintain protections against abuses that can come from an attorney’s targeted solicitations. In addition to complying with applicable state ethical rules, you’ll also need to verify that you’re complying with state and federal laws that impose no-solicitation periods around your intended targets. For example, families and victims of certain types of accidents, such as mass disasters, are often off limits for 30−45 days following the accident. See, e.g.,49 U.S.C. § 1136(g)(2) (prohibiting attorneys from communicating with the victims of certain airplane crashes or their families for 45 days after the accident).
Am I allowed to advertise on the Internet for named plaintiffs in my case?
Yes, provided that the information in your advertisement is correct, is not misleading, and will not create the impression that an attorney-client relationship is being established. In the comment to Model Rule 7.3, the ABA clarified that even though attorney Internet advertising directed at the general public, such as banner ads and websites, needs to comply with the applicable advertising rules, it is not solicitation. Accordingly, attorneys can provide information about class actions they are investigating on their firm’s website, on another website, or in a banner ad. Attorneys may also allow potential clients the option of clicking a button to receive more information, report suspected fraud, or join an email list. Once a potential client has requested information, the attorney’s response to that potential client is not considered to be a solicitation. However, keep in mind that you risk prematurely creating a lawyer-client relationship if you are not careful. To minimize that risk, make certain that you provide a clear message that you are not creating such a relationship. Conduct a conflict check before obtaining any confidential information from the prospective client, and remember that your questionnaires are also likely not privileged. For more information, check out ABA Formal Opinion 10-457, which provides additional insight into how to avoid ethical pitfalls in designing attorney and law firm websites.
In most states, attorneys may also use directory sites, such as Martindale-Hubbell, Super Lawyers, LinkedIn, and Avvo, to advertise their credentials and services to potential clients. Many of these sites then allow potential clients to email the attorney directly. Some of these sites create profiles for attorneys. Make certain that you verify that your profile complies with Rule 7.1 and does not contain any false or misleading communications about you or your services.
Also, in most states, attorneys may pay third parties for generating client leads, including Internet-based leads. However, even though you can pay a third party for advertising and client leads, do not obtain clients by paying a person, company, or website to recommend, endorse, or vouch for you or your services. There are exceptions for usual charges paid to a legal service plan, a not-for-profit service, or a qualified lawyer referral service. For more information about Internet referrals, check your state’s ethical rules and the ABA’s Model Rules.
Can I find potential plaintiffs by responding to people who have posted complaints on the Internet about the topic of my case or the defendant?
It depends. Rule 7.3 prohibits in-person, live telephonic, and real-time electronic solicitation (such as in a chat room) to anyone who is not (1) an attorney, (2) the attorney’s former or existing client, (3) the attorney’s family member, or (4) someone with whom the attorney has a close personal relationship. Most attorneys already know that they cannot approach potential clients by handing out their business cards at accident scenes or cold-calling potential (non-attorney) clients to introduce themselves and their services. But with the vast amount of consumer-provided information now available on the Internet (including consumer complaints), attorneys don’t even have to leave their offices or pick up their phones to violate the solicitation rules.
Some attorneys and paralegals now troll the web for complaint websites, online forums or message boards, and chat rooms in their efforts to find potential named plaintiffs for their cases. But the ethical implications of these different types of websites are not all the same and vary greatly from state to state.
On the somewhat safer end of the spectrum are complaint websites and forums or message boards, which allow the posting of messages on a certain topic but are not live or in real time. Because comments found on these sites may have been posted days, months, or years earlier, it is unlikely that the person who posted it is still online waiting for a response. While most state’s ethical rules allow attorneys to respond to these types of postings to try to find named plaintiffs, any response posted must always comply with Rule 7.1 (i.e., not be misleading) and comply with any other ethical rules in the attorney’s state and in the original author’s state. In addition, be aware that some states may also require that any unsolicited offers to provide legal services posted on these types of sites be properly marked as advertisements.
On the more dangerous end of this spectrum are chat rooms. They differ from complaint websites and forums or message boards in that the conversations in chat rooms are more spontaneous and move at a much faster pace. All participants in the chat room’s discussion are online at the same time and interact with each other immediately. Because chat rooms would allow the attorney and potential client to exchange their text messages in real time, jumping into a chat room discussion to find prospective clients is considered improper solicitation under Model Rule 7.3. Several states have specifically identified “chat rooms” as an impermissible form of solicitation.
Can I advertise for plaintiffs by responding to someone else’s blog, Facebook, or Twitter post?
Do so at your own risk. Unlike your own blog or postings that are your unilateral statements disseminated to the general public, a response to a specific person’s posts (e.g., a complaint about a particular product or drug) is closer to engaging in a conversation with that potential client and may be a violation of the anti-solicitation rules of your state or the state where the person posting the comment lives. And if your response applies the law to the facts of that person’s situation, you also may be engaging in the unauthorized practice of law if you are not licensed to practice in the potential client’s state. If you decide to respond, keep your comments generic and try to move the conversation to a more confidential forum.
What are some of the other methods class action attorneys have ethically used to find plaintiffs?
A great way to find plaintiffs is to make a name for yourself and let others know what type of cases you handle. These individuals can then refer potential clients to you. Referrals can come from many sources. First, defense attorneys: Class action attorneys who only represent defendants sometimes receive calls from individuals seeking a plaintiffs’ class action attorney and will refer those cases to the plaintiffs’ class action attorneys they know and respect. Make sure you’re on that list. Second, attorneys who are not class action attorneys: In the course of working up an individual case, attorneys sometimes discover that their clients’ problems are not unique and that they are merely one of many affected by a company’s actions. Instead of tackling a class action themselves, they will often team up with or refer their clients to a class action attorney. Third, other plaintiffs’ class action attorneys: Plaintiffs’ class action attorneys will team up with other class action firms to spread out the work, risk, and costs involved with the case. Developing relationships with each of these types of attorneys may help you to receive more referrals from your colleagues. Be cautious of paying referral fees to or sharing fees with the referring attorney, unless you have checked your state’s ethical rules first.
Organizations may also refer potential clients. For example, attorneys can create relationships with organizations that may have an interest in the issues raised in their proposed class actions and have access to persons who may fall within the proposed classes. Depending on the subject matter of the case, such groups might include labor unions, nonprofit advocacy organizations, community groups, professional associations, and tenant and homeowners’ associations. While you should consult your state’s ethical rules, these organizations are generally free to refer their members or others to a particular attorney or law firm, as long as the organization was not paid for the referral.
In addition, some attorneys find plaintiffs through referrals from existing plaintiffs or other potential class members. Such referrals are usually allowed as long as the person soliciting clients for the attorney is not receiving consideration for referring the attorney. Be careful of clients who attempt to solicit additional named plaintiffs for the case by blogging or otherwise posting information about the case online. Once the attorney learns of the postings, he or she has a duty to review the posting and ensure that it complies with the ethical rules. For example, confirm that the postings do not overstate the attorney’s abilities or the strength of the case or imply that the attorney will represent anyone who contacts him or her.
Finally, some class action attorneys publish newspaper and magazine advertisements or send out mass mailings targeted at potential class members. These are permissible as long as they are not misleading and comply with all of the other applicable solicitation and advertising rules, e.g., the rules concerning “advertisement” labeling, retention and filing requirements, and time embargoes.
Can I advertise for plaintiffs by sending out a mass text message?
Possibly yes, depending on where you live. Some states, such as Ohio, treat text messages as mass email advertising and allow attorneys to solicit clients via mass text messages under certain conditions. See Ohio Advisory Opinion 2013-2. However, check your state’s ethical rules before taking this approach. And keep in mind that the Telephone Consumer Protection Act, 47 U.S.C. § 227, forbids using “any automated dialing system,” such as a computer program, to contact a cellular phone. Thus, even though your state may allow you to manually send out a mass text message, federal law forbids using a delivery mechanism like an auto-dialer.
Can I offer any type of financial incentives to entice a person to serve as a named plaintiff in my case?
No. Although it is common for courts to grant incentive awards at the end of a case to the class representatives to compensate them for their time and efforts spent representing the class, not all courts find it proper. Some courts have found that a named plaintiff’s interest in such an award may make him or her an inadequate class representative, because the named plaintiff’s and class’s interests are no longer in line—the named plaintiff may be more interested in maximizing his or her own award than ensuring the best recovery for the class. Accordingly, do not tell your potential plaintiffs that they will receive an incentive award (or anything else) from the court in exchange for serving as named plaintiffs or class representatives. If such an award is later granted, let your client be pleasantly surprised. (But if you do discuss incentive awards with your potential plaintiff, explain that you would not ask him or her to support a settlement that he or she doesn’t think is fair as a condition of receiving the award.)
Even more important, do not take it upon yourself to reward the class representatives for serving as named plaintiffs. Never promise or give them anything of value, including a percentage of your fees in the case, in exchange for being named plaintiffs in the case. In addition to violating Model Rule 5.4(a)’s prohibition against sharing legal fees with a nonlawyer, your reward may be seen as an illegal kickback and land you in jail.
If I find a potential plaintiff, how do I make sure that he or she has the right qualities to be a named class representative?
First, Rule 23 requires that the claims of a named plaintiff be “typical” of the claims of other class members. You should perform sufficient investigation to ensure that a potential plaintiff’s claim does not involve unique facts, events, or circumstances. Rule 23 further requires that a named plaintiff “fairly and adequately” represent the interests of the class. To ensure that a potential plaintiff meets this requirement, you should have a frank discussion with the potential plaintiff to ensure that he or she understands and is willing to perform the duties of a named plaintiff. These duties are substantial, and they include the duty to represent the interests of all members of the class; to consider the class’s interest to the same extent as the named plaintiff’s own interest; to participate actively in the litigation, including testifying at deposition and trial and answering discovery; to remain generally aware of the status and progress of the case; and to play a part in decisions regarding strategy and settlement. A potential plaintiff must be willing to perform these duties without the promise of additional compensation.
At some point, your named plaintiff will likely serve as a deponent and possibly a trial witness. When selecting a named plaintiff, consider having a face-to-face conversation that will allow you evaluate the individual’s ability to understand complex questions and communicate effectively. Although a named plaintiff does not need to be highly educated or have a deep understanding of the law, you should consider how responsive the individual will be to your instructions on privilege and confidentiality, as well as how the individual may handle intense questioning at his or her deposition. You should also inquire as to the potential plaintiff’s past civil or criminal litigation experiences when evaluating him or her as a potential witness. While those experiences may not disqualify the individual from adequately representing the class, you do not want to learn about them for the first time at the deposition or when responding to discovery. Finally, inquire into the background leading up to the potential plaintiff’s interaction with the defendant company to discover whether the potential plaintiff bought the product or participated in the transaction simply to be able to bring a case. Bear in mind that there are separate rules that apply to “testers.” Testers are permitted in certain circumstances and require more analysis than is possible in this article.
A Final Note
It is important to keep in mind that class action law is complicated and constantly changing. It is full of pitfalls and places for costly missteps. The best advice for finding plaintiffs and getting into plaintiffs’ class action work is to team up with experienced plaintiffs’ class action attorneys. There will likely be enough work in the case to go around, and you will gain the experience and, of particular importance, the qualifications to satisfy Federal Rule of Civil Procedure 23(g). And a great place to meet these class action attorneys is at the upcoming 17th Annual National Institute on Class Actions, which will be held at the Revere Hotel Boston Common in Boston, Massachusetts, on October 23–24, 2013.
Keywords: litigation, class actions, derivative suits, Model Rules of Professional Conduct, attorney advertising