Hecht v. United Collection Bureau Inc.
Notice about a class-action suit that is published only once in a national newspaper may not comply with due process. The plaintiff, Chana Hecht, sued the defendant debt collector, United Collection Bureau Inc., alleging it failed to provide meaningful disclosure of telephone caller's identities and failed to disclose that any information obtained would be used to collect a debt. The defendant moved to dismiss and argued that the plaintiff's claims it violated the federal Fair Debt Collection Practices Act were litigated already in an earlier class-action suit in the U.S. District Court for the Eastern District of New York. In 2010, a national newspaper, U.S.A. Today, published notice of the earlier class-action suit. Hecht argued that the earlier class-action settlement did not preclude her FDCPA claims, because notice in U.S.A. Today did not comply with due process. The Connecticut District Court found that "constructive notice through publication" may be sufficient, and it granted the defendant's motion to dismiss. Hecht appealed. Claims for damages predominated over claims for injunctive relief in the earlier class action, which requested "maximum statutory damages" and failed to mention injunctive relief. Hecht possessed a due-process right to notice and the opportunity to opt out of the earlier class action. To comply with due-process requirements, the notice provided to absent class members must be "the best practicable, reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action," pursuant to Phillips Petroleum Co. v. Shutts, a 1985 decision of the U.S. Supreme Court. Apparently, there were no responses from class members to the publication of notice in U.S.A. Today about the class-action suit in the Eastern District of New York. "[C]ertification of a class under [Rule 23](b)(2)," wrote the 2nd Circuit, "does not excuse the due process requirement that unnamed class members in a class action predominantly for money damages receive the 'best practicable' notice." The 2nd Circuit found that a single notice, published in a single publication, did not comply with due process. Res judicata did not bar Hecht's claims, and the 2nd Circuit reversed the judgment of the District Court.