This morning, the California Supreme Court handed down its long-awaited decision in the review of Pioneer Electronics (USA), Inc. v. Superior Court (2005) 128 Cal.App.4th 246. Pioneer Electronics dealt with the requisite notice and opportunity to assert a consumer's privacy right accompanying a precertification communication to members of a putative class in a consumer case. The trial court ordered that notices be sent to certain putative class members, and the notices were to state that their names and addresses would be released to the attorneys for the putative class representative unless they affirmatively objected. The Court of Appeal reversed, holding that a trial court must take reasonable steps to assure that the consumer receives actual notice of his or her right to grant or withhold consent of the release of personal information, and that consent for such release be by the consumer's positive act, rather than by mere failure to respond.
The Supreme Court overturned the reversal, finding that the trial properly exercised its discretion. Disregarding the crocodile tears shed by defense counsel as they wept for the privacy rights of their client's customers, the court wrote:
Did these customers have a reasonable expectation that the information would be kept private unless they affirmatively consented? We think not. Pioneer’s complaining customers might reasonably expect to be notified of, and given an opportunity to object to, the release of their identifying information to third persons. Yet it seems unlikely that these customers, having already voluntarily disclosed their identifying information to that company in the hope of obtaining some form of relief, would have a reasonable expectation that such information would be kept private and withheld from a class action plaintiff who possibly seeks similar relief for other Pioneer customers, unless the customer expressly consented to such disclosure. If anything, these complainants might reasonably expect, and even hope, that their names and addresses would be given to any such class action plaintiff.
The Supreme Court went on to note that the release of names and addresses did not constitute a serious invasion of privacy.
"As the trial court stated, the proposed disclosure was not 'particularly sensitive,' as it involved disclosing neither one’s personal medical history or current medical condition nor details regarding one’s personal finances or other financial information, but merely called for disclosure of contact information already voluntarily disclosed to Pioneer."
The Supreme Court also reaffirmed long-standing precedent holding that contact information regarding the identity of potential class members is generally discoverable, so that the lead plaintiff may learn the names of other persons who might assist in prosecuting the case. (Bartold v. Glendale Federal Bank (2000) 81 Cal.App.4th 816, 820-821, 836; Budget Finance Plan v. Superior Court (1973) 34 Cal.App.3d 794, 799-800; Code of Civil Procedure § 2017.010.) Such disclosure involves no revelation of personal or business secrets, intimate activities, or similar private information, and threatens no undue intrusion into one’s personal life, such as mass-marketing efforts or unsolicited sales pitches.
The Court of Appeal's concern that notice letters might never be delivered and read was "misplaced, assuming the notice clearly and conspicuously explains how each customer might register an objection to disclosure." Moreover, a faxed or e-mailed notice might be reasonable and appropriate if the class member has used such communication methods in the past.
Of particular concern and benefit to attorneys representing classes of employees in wage and hour class actions, the Supreme Court focused on the fact that both sides are entitled to have access to percipient witnesses. And a plaintiff’s interest in obtaining contact information for those witnesses "outweighed the possibility that some of these customers might fail to receive their notice and thus lose the opportunity to object to disclosure."
Our discovery statute recognizes that “the identity and location of persons having [discoverable] knowledge” are proper subjects of civil discovery. (Code Civ. Proc., § 2017.010; see Judicial Council Form Interrogatories 12.1 through 12.7.) In a real sense, many of Pioneer’s complaining customers would be percipient witnesses to relevant defects in the DVD players. From the standpoint of fairness to the litigants in prosecuting or defending the forthcoming class action, Pioneer would possess a significant advantage if it could retain for its own exclusive use and benefit the contact information of those customers who complained regarding its product. Were plaintiff also able to contact these customers and learn of their experiences, he could improve his chances of marshalling a successful class action against Pioneer, thus perhaps ultimately benefiting some, if not all, those customers. It makes little sense to make it more difficult for plaintiff to contact them by insisting they first affirmatively contact Pioneer as a condition to releasing the same contact information they already divulged long ago.
This, to us, was at the heart of the dispute. Privacy is often used as a red herring to allow the side with access to the facts to prevent the other side from getting the same access. Too many times, we have struggled to get access to class members, over the objection of defense counsel whom we know (sometimes only based upon information given to us by class members who refuse to provide sworn statements out of a fear of retaliation) to be out interviewing, or overseeing the interviewing of, putative class members who want nothing to do with any conversation with a defense lawyer. The Supreme Court saw through this charade, and rendered a holding that creates fairness and balance to both sides.
Your can download the full text of the opinion here in pdf or word format.
Arnold may be the last hope for business in this state. We need to preserve the right to screw up every once in a while without having to hand over all our profits to some greedy lawyer who probably pockets 95% of the cash.
Posted by: erik h | January 26, 2007 at 12:21 PM