New study: most online U.S. adults find first-class mail more reliable for class action notice than email or electronic banner ads.

PHILADELPHIA, Dec. 20, 2016 /PRNewswire-iReach/ -- A statistically significant nationwide survey has found that most online U.S. adults consider first-class mail to be a more reliable way to receive notice of their class action legal rights than by email or through an internet banner.  The results were consistent across demographic groups with some variation—even most 18-29 yr. old "millennials" who are online and using email found first-class mail more reliable for notice in class actions than electronic means.

The new study comes amid a proposed change to Federal Rule 23(c)(2)(B) that would encourage electronic and other means of notice in "opt-out" class actions, based on rules committee notes indicating that such means "may be more reliable."  Email and banners (small "targeted" ads that appear on browsers, social media, and mobile devices) and are increasingly proposed for class action notice to save money, sometimes in lieu of available mailings.  Rule 23 requires the "best notice practicable," including "individual notice to all those reasonably identifiable."

The study, a summary of which may be viewed at https://www.surveymonkey.com/results/SM-7LGQWGCF/, also found that overwhelming percentages of online adults, when their address is identifiable, expect to receive a notice by first-class mail over electronic means in class actions involving a safety-related defect or a large amount of money, and most expect first-class mail over electronic means even in class actions involving a relatively small amount of money.  The survey took place on the SurveyMonkey platform from Dec. 9 to Dec. 13, 2016, and included 3,187 online respondents, from every state in the U.S.  The study results are considered accurate to a 95% confidence interval, with a 1.8% margin of error.

The Hilsee Group LLC, a nationally-recognized independent class action notice expert firm, commissioned the study.  "Attorneys and courts may be misled without research to help them avoid a historic weakening of the critical individual notice requirement for opt-out class actions," Todd B. Hilsee noted.  In the U.S. opt-out class action system, affected people lose rights and may get no compensation if they fail to respond to class action notices.  In 1966, when the "opt out" class action was enacted, the individual notice requirement was installed.  The study raises more doubts that electronic means of notice—especially small banner ads that consumers hardly notice and rarely click—could constitute a "best practicable" means of "informed consent," in lieu of sending notice to identifiable people at their mailing addresses, before stripping those individuals of their constitutional rights.  "Sometimes lives can be left at risk from weak and ineffective notice in cases involving allegedly-defective products," added Hilsee, referring to the current Pollard v. Remington case, where emails and banner ads have been heavily relied upon despite guns that complaints say may fire without the trigger being pulled.  Claims for repairs under a settlement have been very low.

The Advisory Committee on Civil Rules of the Judicial Conference of the United States must decide after a public comment period closes on Feb. 15, 2017, whether to advance the proposal towards adoption by the Supreme Court and Congress, or leave the current rule as is.  The current rule does not specify which form of notice must be used for individual notice but does not encourage means other than first-class mail.  "First class mail is well known by claims administrators to be the most effective, even today, but a reverse-auction process has driven the effectiveness of notice way down," Hilsee added.  Electronic means are far less expensive than first-class mail, but no study has been provided to the rules committees showing electronic means to be more effective than first-class mail.  The current rule does not prohibit the use of email when postal mailing addresses are unavailable.  A detailed report on the survey results will be made available to the Advisory Committee before the Feb. 15, 2017 public comment deadline.

The Hilsee Group study comes on the heels of the Federal Trade Commission in November issuing 6(b) Orders to eight large claims administrators compelling production of data revealing the response rates to various forms of class action notices, which in turn comes amid increasing reports of low claims rates in class actions.   Claims administrators typically do not publicly disclose detailed claims data unless requested by courts.  Critics say such data may provide an embarrassing window into low response rates to class actions, especially claims-made settlements and those reliant on electronic banner ads.  The data is not due to be submitted to the FTC—which may have to overcome confidentiality arguments—until Jan. 9, 2017, with the date of any subsequent FTC report on the data uncertain.

Source: The Hilsee Group LLC, www.hilseegroup.org, Todd B. Hilsee, Principal, 215-486-2658, email: thilsee@hilseegroup.com, twitter: @hilsee_todd

Todd B. Hilsee was the first person judicially recognized as an expert on class action notice in published decisions in the United States and in Canada.  His work has included Holocaust victims' programs as well as international securities, asbestos, human rights, and hurricane victims' matters.  Hilsee has been cited favorably by many courts, having brought to courts the use of media audience data and "noticeable" notice design techniques.

Mr. Hilsee testified before the Advisory Committee on Civil Rules of the Judicial Conference of the United States, supporting the 2003 plain language amendment to Fed. Rule 23, and subsequently collaborated to write and design the illustrative Model Plain Language Notices for the Federal Judicial Center (FJC) now at www.fjc.gov.  In 2010, he collaborated with the FJC again to create the Judges' Notice and Claims Process Checklist and Plain Language Guide, and contributed to the FJC's Managing Class Action Litigation: A Pocket Guide for Judges.  He will testify in Phoenix, AZ on Jan. 4, 2017, regarding the current rule change proposal.

Mr. Hilsee has authored numerous articles on notice and due process, including in the Georgetown Journal of Legal Ethics, the Tulane Law Review, and Canada'sSupreme Court Law Review.  Hilsee has lectured and/or been featured in educational DVD's and materials used during judicial panels and symposiums, and at law schools including Harvard, Columbia, Temple, Cleveland-Marshall, Tulane and U.S. District Judge workshops.

Media Contact:Todd Hilsee, The Hilsee Group LLC, 215-486-2658, thilsee@hilseegroup.com

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SOURCE The Hilsee Group LLC