Petitioner brought a class action under Fed.Rule Civ.Proc. 23 on
behalf of himself and all odd-lot traders on the New York Stock
Exchange for a certain four-year period, charging respondent
brokerage firms, which handled 99% of the Exchange's odd-lot
business, and respondent Exchange with violating the antitrust and
securities laws. There followed a series of decisions by the
District Court and the Court of Appeals. The District Court
ultimately decided that the suit could be maintained as a class
action, and, after finding that some two and a quarter million
members of the prospective class could be identified by name and
address with reasonable effort and that it would cost $225,000 to
send individual notice to all of them, proposed a notification
scheme providing for individual notice to only a limited number of
prospective class members and notice by publication to the
remainder. The District Court then held a preliminary hearing on
the merits, and after finding that petitioner was "more than
likely" to prevail at trial, ruled that respondents should bear 90%
of the costs of the notification scheme. The Court of Appeals
reversed and ordered the suit dismissed as a class action,
disapproving the District Court's partial reliance on publication
notice. The Court of Appeals held that Rule 23(c)(2) required
individual notice to all identifiable class members; that the
District Court had no authority to hold a preliminary hearing on
the merits for the purpose of allocating notice costs; that the
entire notice expense should fall on petitioner; and that the
proposed class action was unmanageable under Rule 23(b)(3)(D).
Petitioner contends that the Court of Appeals had no jurisdiction
to review the District Court's orders, and further, that the Court
of Appeals decided the above issues incorrectly.
Held:
1. The District Court's resolution of the notice problems
constituted a "final" decision within the meaning of 28 U.S.C. §
1291, and was therefore appealable as of right under that section.
Pp.
417 U. S.
169-172.
(a) Section 1291 does not limit appellate review to "those
Page 417 U. S. 157
final judgments which terminate an action . . . ," but rather
the requirement of finality is to be given a "practical, rather
than a technical construction."
Cohen v. Beneficial Loan
Corp., 337 U. S. 541,
337 U. S.
545-546. Pp.
417 U. S.
170-172.
(b) The District Court's decision that respondents could
lawfully be required to bear the costs of notice involved a
collateral matter unrelated to the merits of petitioner's claims
and was "a final disposition of a claimed right which is not an
ingredient of the cause of action, and does not require
consideration with it,"
Cohen, supra, at
337 U. S.
546-547. P.
417 U. S.
172.
2. The District Court's resolution of the notice problems failed
to comply with the notice requirement of Rule 23(c)(2). Pp.
417 U. S.
173-177.
(a) The express language and intent of Rule 23(c)(2) leave no
doubt that individual notice must be sent to all class members who
can be identified through reasonable effort. Here there was nothing
to show that individual notice could not be mailed to each of the
two and a quarter million class members whose names and addresses
were easily ascertainable, and, for these class members, individual
notice was clearly the "best notice practicable" within the meaning
of Rule 23(c)(2). Pp.
417 U. S.
173-175.
(b) The facts that the cost of sending individual notices would
be prohibitively high to petitioner, who has only a $70 stake in
the matter, or that individual notice might be unnecessary because
no prospective class member has a large enough stake to justify
separate litigation of his individual claim, do not dispense with
the individual notice requirement, since individual notice to
identifiable class members is not a discretionary consideration to
be waived in a particular case, but an unambiguous requirement of
Rule 23. Pp.
417 U. S.
175-176.
(c) Adequate representation, in itself, does not satisfy Rule
23(c)(2), since the Rule speaks to notice, as well as to adequacy
of representation, and requires that both be provided. Otherwise no
notice at all, published or otherwise, would be required in this
case. Pp.
417 U. S.
176-177.
3. Petitioner must bear the cost of notice to the members of his
class, and it was improper for the District Court to impose part of
the cost on respondents. Pp.
417 U. S.
177-179.
(a) There is nothing in either the language or history of Rule
23 that gives a court any authority to conduct a preliminary
inquiry into the merits of a suit in order to determine whether
Page 417 U. S. 158
it may be maintained as a class action, and, indeed, such a
procedure contravenes the Rule by allowing a representative
plaintiff to secure the benefits of a class action without first
satisfying the requirements of the Rule. Pp.
417 U. S.
177-178.
(b) A preliminary determination of the merits may substantially
prejudice a defendant, since it is unaccompanied by the traditional
rules and procedures applicable to civil trials. P.
417 U. S.
178.
(c) Where, as here, the relationship between the parties is
truly adversary, the plaintiff must pay for the cost of notice as
part of the ordinary burden of financing his own suit. Pp.
417 U. S.
178-179.
479 F.2d 1005, vacated and remanded.
POWELL, J., delivered the opinion of the Court, in which BURGER,
C.J., and STEWART, WHITE, BLACKMUN, and REHNQUIST, JJ., joined.
DOUGLAS, J., filed an opinion dissenting in part, in which BRENNAN
and MARSHALL, JJ., joined,
post, p.
417 U. S.
179.
Page 417 U. S. 159
MR. JUSTICE POWELL delivered the opinion of the Court.
On May 2, 1966, petitioner filed a class action on behalf of
himself and all other odd-lot [
Footnote 1] traders on the New York Stock Exchange (the
Exchange). The complaint charged respondents with violations of the
antitrust and securities laws and demanded damages for petitioner
and his class. Eight years have elapsed, but there has been no
trial on the merits of these claims. Both the parties and the
courts are still wrestling with the complex questions surrounding
petitioner's attempt to maintain his suit as a class action under
Fed.Rule Civ.Proc. 23. We granted certiorari to resolve some of
these difficulties. 414 U.S. 908 (1973).
Page 417 U. S. 160
I
Petitioner brought this class action in the United States
District Court for the Southern District of New York. Originally,
he sued on behalf of all buyers and sellers of odd lots on the
Exchange, but subsequently the class was limited to those who
traded in odd lots during the period from May 1, 1962, through June
30, 1966. 52 F.R.D. 253, 261 (1971). Throughout this period,
odd-lot trading was not part of the Exchange's regular auction
market, but was handled exclusively by special odd-lot dealers, who
bought and sold for their own accounts as principals. Respondent
brokerage firms Carlisle & Jacquelin and DeCoppet & Doremus
together handled 99% of the Exchange's odd-lot business. S.E.C.,
Report of Special Study of Securities Markets, H.R.Doc. No. 95, pt.
2, 88th Cong., 1st Sess., 172 (1963). They were compensated by the
odd-lot differential, a surcharge imposed on the odd-lot investor
in addition to the standard brokerage commission applicable to
round-lot transactions. For the period in question the differential
was l/8 of a point (12 1/2�) per share on stocks trading below $40
per share and 1/4 of a point (25�) per share on stocks trading at
or above $40 per share. [
Footnote
2]
Petitioner charged that respondent brokerage firms had
monopolized odd-lot trading and set the differential at an
excessive level in violation of §§ 1 and 2 of the Sherman Act, 15
U.S.C. §§ 1 and 2, and he demanded treble damages for the amount of
the overcharge. Petitioner also demanded unspecified money damages
from the Exchange for its alleged failure to regulate the
differential for the protection of investors in violation of §§ 6
and 19 of the Securities Exchange Act of 1934, 15 U.S.C. §§ 78f and
78s. Finally, he requested attorneys'
Page 417 U. S. 161
fees and injunctive prohibition of future excessive charges.
A critical fact in this litigation is that petitioner's
individual stake in the damages award he seeks is only $70. No
competent attorney would undertake this complex antitrust action to
recover so inconsequential an amount. Economic reality dictates
that petitioner's suit proceed as a class action or not at all.
Opposing counsel have therefore engaged in prolonged combat over
the various requirements of Rule 23. The result has been an
exceedingly complicated series of decisions by both the District
Court and the Court of Appeals for the Second Circuit. To
understand the labyrinthian history of this litigation, a
preliminary overview of the decisions may prove useful.
In the beginning, the District Court determined that
petitioner's suit was not maintainable as a class action. On
appeal, the Court of Appeals issued two decisions known popularly
as
Eisen I and
Eisen II. The first held that the
District Court's decision was a final order, and thus appealable.
In the second, the Court of Appeals intimated that petitioner's
suit could satisfy the requirements of Rule 23, but it remanded the
case to permit the District Court to consider the matter further.
After conducting several evidentiary hearings on remand, the
District Court decided that the suit could be maintained as a class
action and entered orders intended to fulfill the notice
requirements of Rule 23. Once again, the case was appealed. The
Court of Appeals then issued its decision in
Eisen III,
and ended the trilogy by denying class action status to
petitioner's suit. We now review these developments in more
detail.
Eisen I
As we have seen, petitioner began this action in May, 1966. In
September of that year, the District Court
Page 417 U. S. 162
dismissed the suit as a class action. 41 F.R.D. 147. Following
denial of his motion for interlocutory review under 28 U.S.C. §
1292(b), petitioner took an appeal as of right under § 1291.
Respondents then moved to dismiss on the ground that the order
appealed from was not final. In
Eisen I, the Court of
Appeals held that the denial of class action status in this case
was appealable as a final order under § 1291. 370 F.2d 119 (1966),
cert. denied, 386 U.S. 1035 (1967). This was so because,
as a practical matter, the dismissal of the class action aspect of
petitioner's suit was a "death knell" for the entire action. The
court thought this consequence rendered the order dismissing the
class action appealable under
Cohen v. Beneficial Loan
Corp., 337 U. S. 541,
337 U. S. 546
(1949).
Eisen II
Nearly 18 months later, the Court of Appeals reversed the
dismissal of the class action in a decision known as
Eisen
II. 391 F.2d 555 (1968). In reaching this result, the court
undertook an exhaustive but ultimately inconclusive analysis of
Rule 23. Subdivision (a) of the Rule sets forth four prerequisites
to the maintenance of any suit as a class action:
"(1) the class is so numerous that joinder of all members is
impracticable, (2) there are questions of law or fact common to the
class, (3) the claims or defenses of the representative parties are
typical of the claims or defenses of the class, and (4) the
representative parties will fairly and adequately protect the
interests of the class."
The District Court had experienced little difficulty in finding
that petitioner satisfied the first three prerequisites, but had
concluded that petitioner might not "fairly and adequately protect
the interests of the class" as required by Rule 23(a)(4). The Court
of Appeals indicated its disagreement with the
Page 417 U. S. 163
reasoning behind the latter conclusion, and directed the
District Court to reconsider the point.
In addition to meeting the four conjunctive requirements of
23(a), a class action must also qualify under one of the three
subdivisions of 23(b). [
Footnote
3] Petitioner argued that the suit was maintainable as a class
action under all three subdivisions. The Court of Appeals held the
first two subdivisions inapplicable to this suit [
Footnote 4] and
Page 417 U. S. 164
therefore turned its attention to the third subdivision, (b)(3).
That subdivision requires a court to determine whether "questions
of law or fact common to the members of the class predominate over
any questions affecting only individual members," and whether "a
class action is superior to other available methods for the fair
and efficient adjudication of the controversy." More specifically,
it identifies four factors relevant to these inquiries. After a
detailed review of these provisions, the Court of Appeals concluded
that the only potential barrier to maintenance of this suit as a
class action was the Rule 23(b)(3)(D) directive that a court
evaluate "the difficulties likely to be encountered in the
management of a class action." Commonly referred to as
"manageability," this consideration encompasses the whole range of
practical problems that may render the class action format
inappropriate for a particular suit. With reference to this
litigation, the Court of Appeals noted that the difficulties of
distributing any ultimate recovery to the class members would be
formidable, though not necessarily insuperable, and commented that
it was "reluctant to permit actions to proceed where they are not
likely to benefit anyone but the lawyers who bring them." 391 F.2d
at 567. The Court therefore directed the District Court to conduct
"a further inquiry . . . in order to consider the mechanics
involved in the administration of the present action."
Ibid.
Page 417 U. S. 165
Finally, the Court of Appeals turned to the most imposing
obstacle to this class action -- the notice requirement of Rule
23(c)(2). The District Court had held that both the Rule and the
Due Process Clause of the Fifth Amendment required individual
notice to all class members who could be identified. 41 F.R.D. at
151. Petitioner objected that mailed notice to the entire class
would be prohibitively expensive, and argued that some form of
publication notice would suffice. The Court of Appeals declined to
settle this issue, noting that,
"[o]n the record before us, we cannot arrive at any rational and
satisfactory conclusion on the propriety of resorting to some form
of publication as a means of giving the necessary notice to all
members of the class on behalf of whom the action is stated to be
commenced and maintained."
391 F.2d at 569.
The outcome of
Eisen II was a remand for an evidentiary
hearing on the questions of notice, manageability, adequacy of
representation, and "any other matters which the District Court may
consider pertinent and proper."
Id. at 570. And in a
ruling that aroused later controversy, the Court of Appeals
expressly purported to retain appellate jurisdiction while the case
was heard on remand.
Eisen III
After it held the evidentiary hearing on remand, which together
with affidavits and stipulations provided the basis for extensive
findings of fact, the District Court issued an opinion and order
holding the suit maintainable as a class action. 52 F.R.D. 253
(1971). The court first noted that petitioner satisfied the
criteria identified by the Court of Appeals for determining
adequacy of representation under Rule 23(a)(4). Then it turned to
the more difficult question of manageability. Under this general
rubric, the court dealt with problems of the computation
Page 417 U. S. 166
of damages, the mechanics of administering this suit as a class
action, and the distribution of any eventual recovery. The
last-named problem had most troubled the Court of Appeals,
prompting its remark that, if "class members are not likely ever to
share in an eventual judgment, we would probably not permit the
class action to continue." 391 F.2d at 567. The District Court
attempted to resolve this difficulty by embracing the idea of a
"fluid class" recovery, whereby damages would be distributed to
future odd-lot traders, rather than to the specific class members
who were actually injured. The court suggested that "a fund
equivalent to the amount of unclaimed damages might be established
and the odd-lot differential reduced in an amount determined
reasonable by the court until such time as the fund is depleted."
52 F.R.D. at 265. The need to resort to this expedient of recovery
by the "next best class" arose from the prohibitively high cost of
computing and awarding multitudinous small damages claims on an
individual basis.
Finally, the District Court took up the problem of notice. The
court found that the prospective class included some six million
individuals, institutions, and intermediaries of various sorts;
that with reasonable effort some two million of these odd-lot
investors could be identified by name and address; [
Footnote 5] and that the names and addresses
of an additional 250,000 persons who had participated in special
investment programs involving
Page 417 U. S. 167
odd-lot trading [
Footnote 6]
could also be identified with reasonable effort. Using the then
current first-class postage rate of six cents, the court determined
that stuffing and mailing each individual notice form would cost 10
cents. Thus, individual notice to all identifiable class members
would cost $225,000, [
Footnote
7] and additional expense would be incurred for suitable
publication notice designed to reach the other four million class
members.
The District Court concluded, however, that neither Rule
23(c)(2) nor the Due Process Clause required so substantial an
expenditure at the outset of this litigation. Instead, it proposed
a notification scheme consisting of four elements: (1) individual
notice to all member firms of the Exchange and to commercial banks
with large trust departments; (2) individual notice to the
approximately 2,000 identifiable class members with 10 or more
odd-lot transactions during the relevant period; (3) individual
notice to an additional 5,000 class members selected at random; and
(4) prominent publication notice in the Wall Street Journal and in
other newspapers in New York and California. The court calculated
that this package would cost approximately $21,720.
The only issue not resolved by the District Court in its first
opinion on remand from
Eisen II was who should bear the
cost of notice. Because petitioner understandably declined to pay
$21,720 in order to litigate an action
Page 417 U. S. 168
involving an individual stake of only $70, this question
presented something of a dilemma:
"If the expense of notice is placed upon [petitioner], it would
be the end of a possibly meritorious suit, frustrating both the
policy behind private antitrust actions and the admonition that the
new Rule 23 is to be given a liberal, rather than a restrictive,
interpretation,
Eisen II at 563. On the other hand, if
costs were arbitrarily placed upon [respondents] at this point, the
result might be the imposition of an unfair burden founded upon a
groundless claim. In addition to the probability of encouraging
frivolous class actions, such a step might also result in
[respondents'] passing on to their customers, including many of the
class members in this case, the expenses of defending these
actions."
52 F.R.D. at 269. Analogizing to the laws of preliminary
injunctions, the court decided to impose the notice cost on
respondents if petitioner could show a strong likelihood of success
on the merits, and it scheduled a preliminary hearing on the merits
to facilitate this determination. After this hearing the District
Court issued an opinion and order ruling that petitioner was "more
than likely" to prevail at trial and that respondents should bear
90% of the cost of notice, or $19,548. 54 F.R.D. 565, 567
(1972).
Relying on the purported retention of jurisdiction by the Court
of Appeals after
Eisen II, respondents, on May 1, 1972,
obtained an order directing the clerk of the District Court to
certify and transmit the record for appellate review. Subsequently,
respondents also filed a notice of appeal under 28 U.S.C. § 1291.
Petitioner's motion to dismiss on the ground that the appeal had
not been taken from a final order was denied by the Court of
Appeals on June 29, 1972.
Page 417 U. S. 169
On May 1, 1973, the Court of Appeals issued
Eisen III.
479 F.2d 1005. The majority disapproved the District Court's
partial reliance on publication notice, holding that Rule 23(c)(2)
required individual notice to all identifiable class members. The
majority further ruled that the District Court had no authority to
conduct a preliminary hearing on the merits for the purpose of
allocating costs, and that the entire expense of notice necessarily
fell on petitioner, as representative plaintiff. Finally, the Court
of Appeals rejected the expedient of a fluid-class recovery, and
concluded that the proposed class action was unmanageable under
Rule 23(b)(3)(D). For all of these reasons, the Court of Appeals
ordered the suit dismissed as a class action. One judge concurred
in the result solely on the ground that the District Court had
erred in imposing 90% of the notice costs on respondents.
Petitioner's requests for rehearing and rehearing en banc were
denied. 479 F.2d at 1020.
Thus, after six and one-half years and three published
decisions, the Court of Appeals endorsed the conclusion reached by
the District Court in its original order in 1966 -- that
petitioner's suit could not proceed as a class action. In its
procedural history, at least, this litigation has lived up to Judge
Lumbard's characterization of it as a "Frankenstein monster posing
as a class action."
Eisen II, 391 F.2d at 572.
II
At the outset we must decide whether the Court of Appeals in
Eisen III had jurisdiction to review the District Court's
orders permitting the suit to proceed as a class action and
allocating the cost of notice. Petitioner contends that it did not.
Respondents counter by asserting two independent bases for
appellate jurisdiction: first, that the orders in question
constituted a "final"
Page 417 U. S. 170
decision within the meaning of 28 U.S.C. § 1291, [
Footnote 8] and were therefore appealable as
of right under that section; and, second, that the Court of Appeals
in
Eisen II expressly retained jurisdiction pending
further development of a factual record on remand, and that
consequently no new jurisdictional basis was required for the
decision in
Eisen III. Because we agree with the first
ground asserted by respondents, we have no occasion to consider the
second.
Restricting appellate review to "final decisions" prevent the
debilitating effect on judicial administration caused by piecemeal
appellate disposition of what is, in practical consequence, but a
single controversy. While the application of § 1291 in most cases
is plain enough, determining the finality of a particular judicial
order may pose a close question. No verbal formula yet devised can
explain prior finality decisions with unerring accuracy or provide
an utterly reliable guide for the future. [
Footnote 9] We know, of course, that § 1291 does
not
Page 417 U. S. 171
limit appellate review to "those final judgments which terminate
an action . . . ,"
Cohen v. Beneficial Loan Corp., 337
U.S. at
337 U. S. 545,
but rather that the requirement of finality is to be given a
"practical, rather than a technical construction."
Id. at
337 U. S. 546.
The inquiry requires some evaluation of the competing
considerations underlying all questions of finality -- "the
inconvenience and costs of piecemeal review on the one hand and the
danger of denying justice by delay on the other."
Dickinson v.
Petroleum Conversion Corp., 338 U. S. 507,
338 U. S. 511
(1950) (footnote omitted).
We find the instant case controlled by our decision in
Cohen
v. Beneficial Loan Corp., supra. There, the Court considered
the applicability in a federal diversity action of a forum state
statute making the plaintiff in a stockholder's derivative action
liable for litigation expenses, if ultimately unsuccessful, and
entitling the corporation to demand security in advance for their
payment. The trial court ruled the statute inapplicable, and the
corporation sought immediate appellate review over the
stockholder's objection that the order appealed from was not final.
This Court held the order appealable on two grounds. First, the
District Court's finding was not "tentative, informal or
incomplete," 337 U.S. at
337 U. S. 546,
but settled conclusively the corporation's claim that it was
entitled by state law to require the shareholder to post security
for costs. Second, the decision did not constitute merely a "step
toward final disposition of the merits of the case. . . ."
Ibid. Rather, it concerned a collateral matter that could
not be reviewed effectively on appeal from the final judgment. The
Court summarized its conclusion in this way:
"This decision appears to fall in that small class which finally
determine claims of right separable from, and collateral to, rights
asserted in the action,
Page 417 U. S. 172
too important to be denied review and too independent of the
cause itself to require that appellate consideration be deferred
until the whole case is adjudicated."
Ibid.
Analysis of the instant case reveals that the District Court's
order imposing 90% of the notice costs on respondents likewise
falls within "that small class." It conclusively rejected
respondents' contention that they could not lawfully be required to
bear the expense of notice to the members of petitioner's proposed
class. Moreover, it involved a collateral matter unrelated to the
merits of petitioner's claims. Like the order in
Cohen,
the District Court's judgment on the allocation of notice costs was
"a final disposition of a claimed right which is not an ingredient
of the cause of action and does not require consideration with it,"
id. at
337 U. S.
546-547, and it was similarly appealable as a "final
decision" under § 1291. In our view, the Court of Appeals therefore
had jurisdiction to review fully the District Court's resolution of
the class action notice problems in this case, for that court's
allocation of 90% of the notice costs to respondents was but one
aspect of its effort to construe the requirements of Rule 23(c)(2)
in a way that would permit petitioner's suit to proceed as a class
action. [
Footnote 10]
III
.
Turning to the merits of the case, we find that the District
Court's resolution of the notice problems was
Page 417 U. S. 173
erroneous in two respects. First, it failed to comply with the
notice requirements of Rule 23(c)(2), and second, it imposed part
of the cost of notice on respondents.
A
Rule 23(c)(2) provides that, in any class action maintained
under subdivision (b)(3), each class member shall be advised that
he has the right to exclude himself from the action on request or
to enter an appearance through counsel, and further that the
judgment, whether favorable or not, will bind all class members not
requesting exclusion. To this end, the court is required to direct
to class members "the best notice practicable under the
circumstances, including individual notice to all members who can
be identified through reasonable effort." [
Footnote 11] We think the import of this
language is unmistakable. Individual notice must be sent to all
class members whose names and addresses may be ascertained through
reasonable effort.
The Advisory Committee's Note to Rule 23 reinforces this
conclusion.
See 28 U.S.C.App. p. 7765. The Advisory
Committee described subdivision (c)(2) as "not merely
discretionary," and added that the
"mandatory notice pursuant to subdivision (c)(2). . . is
designed to fulfill requirements of due process to which the class
action procedure is, of course, subject."
Id. at 7768. The
Page 417 U. S. 174
Committee explicated its incorporation of due process standards
by citation to
Mullane v. Central Hanover Bank & Trust
Co., 339 U. S. 306
(1950), and like cases.
In
Mullane, the Court addressed the constitutional
sufficiency of publication notice, rather than mailed individual
notice to known beneficiaries of a common trust fund as part of a
judicial settlement of accounts. The Court observed that notice and
an opportunity to be heard were fundamental requisites of the
constitutional guarantee of procedural due process. It further
stated that notice must be
"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."
Id. at
339 U. S. 314.
The Court continued:
"But when notice is a person's due, process which is a mere
gesture is not due process. The means employed must be such as one
desirous of actually informing the absentee might reasonably adopt
to accomplish it. The reasonableness, and hence the constitutional
validity, of any chosen method may be defended on the ground that
it is, in itself, reasonably certain to inform those affected."
Id. at
339 U. S. 315.
The Court then held that publication notice could not satisfy due
process where the names and addresses of the beneficiaries were
known. [
Footnote 12] In such
cases, "the reasons
Page 417 U. S. 175
disappear for resort to means less likely than the mails to
apprise them of [an action's] pendency."
Id. at
339 U. S.
318.
In
Schroeder v. City of New York, 371 U.
S. 208 (1962), decided prior to the promulgation of
amended Rule 23, the Court explained that
Mullane required
rejection of notice by publication where the name and address of
the affected person were available. The Court stated that the
"general rule" is that "notice by publication is not enough with
respect to a person whose name and address are known or very easily
ascertainable. . . ."
Id. at
371 U. S.
212-213. The Court also noted that notice by publication
had long been recognized as a poor substitute for actual notice,
and that its justification was "
difficult, at best.'"
Id. at 371 U. S.
213.
Viewed in this context, the express language and intent of Rule
23(c)(2) leave no doubt that individual notice must be provided to
those class members who are identifiable through reasonable effort.
In the present case, the names and addresses of 2,250,000 class
members are easily ascertainable, and there is nothing to show that
individual notice cannot be mailed to each. For these class
members, individual notice is clearly the "best notice practicable"
within the meaning of Rule 23(c)(2) and our prior decisions.
Petitioner contends, however, that we should dispense with the
requirement of individual notice in this case, and he advances two
reasons for our doing so. First, the prohibitively high cost of
providing individual notice to 2,250,000 class members would end
this suit as a class action and effectively frustrate petitioner's
attempt to vindicate the policies underlying the antitrust and
securities
Page 417 U. S. 176
laws. Second, petitioner contends that individual notice is
unnecessary in this case, because no prospective class member has a
large enough stake in the matter to justify separate litigation of
his individual claim. Hence, class members lack any incentive to
opt out of the class action even if notified.
The short answer to these arguments is that individual notice to
identifiable class members is not a discretionary consideration to
be waived in a particular case. It is, rather, an unambiguous
requirement of Rule 23. As the Advisory Committee's Note explained,
the Rule was intended to insure that the judgment, whether
favorable or not, would bind all class members who did not request
exclusion from the suit. 281 U.S.C.App. pp. 7765-7768. Accordingly,
each class member who can be identified through reasonable effort
must be notified that he may request exclusion from the action and
thereby preserve his opportunity to press his claim separately or
that he may remain in the class and perhaps participate in the
management of the action. There is nothing in Rule 23 to suggest
that the notice requirements can be tailored to fit the pocketbooks
of particular plaintiffs. [
Footnote 13]
Petitioner further contends that adequate representation, rather
than notice, is the touchstone of due process in a class action,
and therefore satisfies Rule 23. We think this view has little to
commend it. To begin with, Rule 23 speaks to notice as well as to
adequacy of representation, and requires that both be provided.
Moreover, petitioner's argument proves too much, for it
Page 417 U. S. 177
quickly leads to the conclusion that no notice at all, published
or otherwise, would be required in the present case. This cannot be
so, for quite apart from. what due process may require, the command
of Rule 23 is clearly to the contrary. We therefore conclude that
Rule 23(c)(2) requires that individual notice be sent to all class
members who can be identified with reasonable effort. [
Footnote 14]
B
We also agree with the Court of Appeals that petitioner must
bear the cost of notice to the members of his class. The District
Court reached the contrary conclusion and imposed 90% of the notice
cost on respondents. This decision was predicated on the court's
finding, made after a preliminary hearing on the merits of the
case, that petitioner was "more than likely" to prevail on his
claims. Apparently, that court interpreted Rule 23 to authorize
such a hearing as part of the determination whether a suit may be
maintained as a class action. We disagree.
We find nothing in either the language or history of Rule 23
that gives a court any authority to conduct a preliminary inquiry
into the merits of a suit in order to determine whether it may be
maintained as a class action. Indeed, such a procedure contravenes
the Rule by allowing a representative plaintiff to secure the
benefits of a class action without first satisfying the
requirements for it. He is thereby allowed to obtain a
determination on the merits of the claims advanced on
Page 417 U. S. 178
behalf of the class without any assurance that a class action
may be maintained. This procedure is directly contrary to the
command of subdivision (c)(1) that the court determine whether a
suit denominated a class action may be maintained as such "[a]s
soon as practicable after the commencement of [the] action. . . ."
In short, we agree with Judge Wisdom's conclusion in
Miller v.
Mackey International, 452 F.2d 424 (CA5 1971), where the court
rejected a preliminary inquiry into the merits of a proposed class
action:
"In determining the propriety of a class action, the question is
not whether the plaintiff or plaintiffs have stated a cause of
action or will prevail on the merits, but rather whether the
requirements of Rule 23 are met."
Id. at 427. Additionally, we might note that a
preliminary determination of the merits may result in substantial
prejudice to a defendant, since of necessity it is not accompanied
by the traditional rules and procedures applicable to civil trials.
The court's tentative findings, made in the absence of established
safeguards, may color the subsequent proceedings and place an
unfair burden on the defendant.
In the absence of any support under Rule 23, petitioner's effort
to impose the cost of notice on respondents must fail. The usual
rule is that a plaintiff must initially bear the cost of notice to
the class. The exceptions cited by the District Court related to
situations where a fiduciary duty preexisted between the plaintiff
and defendant, as in a shareholder derivative suit. [
Footnote 15] Where, as here, the
relationship between the parties is truly adversary,
Page 417 U. S. 179
the plaintiff must pay for the cost of notice as part of the
ordinary burden of financing his own suit.
Petitioner has consistently maintained, however, that he will
not bear the cost of notice under subdivision (c)(2) to members of
the class as defined in his original complaint.
See 479
F.2d at 1008; 52 F.R.D. at 269. We therefore remand the cause with
instructions to dismiss the class action as so defined. [
Footnote 16]
The judgment of the Court of Appeals is vacated, and the cause
remanded for proceedings consistent with this opinion.
It is so ordered.
[
Footnote 1]
Odd lots are shares traded in lots of fewer than a hundred.
Shares traded in units of a hundred or multiples thereof are round
lots.
[
Footnote 2]
On July 1, 1966, the $40 "breakpoint" was raised to $55.
[
Footnote 3]
"(b) Class Actions Maintainable."
"An action may be maintained as a class action if the
prerequisites of subdivision (a) are satisfied, and in
addition:"
"(1) the prosecution of separate actions by or against
individual members of the class would create a risk of"
"(A) inconsistent or varying adjudications with respect to
individual members of the class which would establish incompatible
standards of conduct for the party opposing the class, or"
"(B) adjudications with respect to individual members of the
class which would, as a practical matter, be dispositive of the
interests of the other members not parties to the adjudications or
substantially impair or impede their ability to protect their
interests; or"
"(2) the party opposing the class has acted or refused to act on
grounds generally applicable to the class, thereby making
appropriate final injunctive relief or corresponding declaratory
relief with respect to the class as a whole; or"
"(3) the court finds that the questions of law or fact common to
the members of the class predominate over any questions affecting
only individual members, and that a class action is superior to
other available methods for the fair and efficient adjudication of
the controversy. The matters pertinent to the findings include: (A)
the interest of members of the class in individually controlling
the prosecution or defense of separate actions; (B) the extent and
nature of any litigation concerning the controversy already
commenced by or against members of the class; (C) the desirability
or undesirability of concentrating the litigation of the claims in
the particular forum; (D) the difficulties likely to be encountered
in the management of a class action."
[
Footnote 4]
Before the Court of Appeals, petitioner dropped the contention
that the suit qualified under subdivision (b)(1)(B). The court held
subdivision (b)(1)(A) inapplicable on the ground that the
prospective class consisted entirely of small claimants, none of
whom could afford to litigate this action in order to recover his
individual claim and that consequently there was little chance
of
"inconsistent or varying adjudications with respect to
individual members of the class which would establish incompatible
standards of conduct for the party opposing the class. . . ."
Subdivision (b)(2) was held to apply only to actions exclusively
or predominantly for injunctive or declaratory relief. Advisory
Committee's Note, Proposed Rules of Civil Procedure, 28 U.S.C.App.
p. 7766.
[
Footnote 5]
These two million traders dealt with brokerage firms who
transmitted their odd-lot transactions to respondents Carlisle
Jacquelin and DeCoppet Doremus via teletype. By comparing the
odd-lot firms' computerized records of these teletype transactions
and the general services brokerage firms' computerized records of
all customer names and addresses, the names and addresses of these
two million odd-lot traders can be obtained.
[
Footnote 6]
In the period from May, 1962, through June, 1968, 100,000
individuals had odd-lot transactions through participation in the
Monthly Investment Plan operated by the Exchange and 150,000
persons traded in odd lots through participation in a number of
payroll deduction plans operated by Merrill Lynch, Pierce, Fenner
& Smith,
[
Footnote 7]
Adjusting this figure to reflect the subsequent 4� increase in
first class postage would yield a figure of $315,000.
[
Footnote 8]
Section 1291 provides:
"The courts of appeals shall have jurisdiction of appeals from
all final decisions of the district courts of the United States,
the United States District Court for the District of the Canal
Zone, the District Court of Guam, and the District Court of the
Virginia Islands, except where a direct review may be had in the
Supreme Court."
[
Footnote 9]
As long ago as 1892, the Court complained:
"Probably no question of equity practice has been the subject of
more frequent discussion in this court than the finality of
decrees. . . . The cases, it must be conceded, are not altogether
harmonious."
McGourkey v. Toledo & Ohio R. Co., 146 U.
S. 536,
146 U. S.
544-545. In the intervening years, the difficulty of
resolving such questions has not abated. As Mr. Justice Black
commented in
Gillespie v. U.S. Steel
Corp., 379 U. S. 148,
379 U. S. 152
(1964),
"whether a ruling is 'final' within the meaning of § 1291 is
frequently so close a question that decision of that issue either
way can be supported with equally forceful arguments, and . . . it
is impossible to devise a formula to resolve all marginal cases
coming within what might well be called the 'twilight one' of
finality."
[
Footnote 10]
As explained in Part III of this opinion, we find the notice
requirements of Rule 23 to be dispositive of petitioner's attempt
to maintain the class action as presently defined. We therefore
have no occasion to consider whether the Court of Appeals correctly
resolved the issues of manageability and fluid-class recovery, or
indeed, whether those issues were properly before the Court of
Appeals under the theory of retained jurisdiction.
[
Footnote 11]
Emphasis added. Subdivision (c)(2) provides in full:
"(2) 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. The
notice shall advise each member that (A) the court will exclude him
from the class if he so requests by a specified date; (B) the
judgment, whether favorable or not, will include all members who do
not request exclusion; and (C) any member who does not request
exclusion may, if he desires, enter an appearance through his
counsel."
[
Footnote 12]
The Court's discussion of the inadequacies of published notice
bears attention:
"It would be idle to pretend that publication alone, as
prescribed here, is a reliable means of acquainting interested
parties of the fact that their rights are before the courts. . . .
Chance alone brings to the attention of even a local resident an
advertisement in small type inserted in the back pages of a
newspaper, and, if he makes his home outside the area of the
newspaper's normal circulation, the odds that the information will
never reach him are large indeed. The chance of actual notice is
further reduced when, as here, the notice required does not even
name those whose attention it is supposed to attract, and does not
inform acquaintances who might call it to attention."
339 U.S. at
339 U. S.
315.
[
Footnote 13]
Petitioner also argues that class members will not opt out
because the statute of limitations has long since run out on the
claims of all class members other than petitioner. This contention
is disposed of by our recent decision in
American Pipe &
Construction Co. v. Utah, 414 U. S. 538
(1974), which established that commencement of a class action tolls
the applicable statute of limitations as to all members of the
class.
[
Footnote 14]
We are concerned here only with the notice requirements of
subdivision (c)(2), which are applicable to class actions
maintained under subdivision (b)(3). By its terms, subdivision
(c)(2) is inapplicable to class actions for injunctive or
declaratory relief maintained under subdivision (b)(2).
Petitioner's effort to qualify his suit as a class action under
subdivisions (b)(1) and (b)(2) was rejected by the Court of
Appeals.
See n 4,
supra.
[
Footnote 15]
See, e.g., Dolgow v. Anderson, 43 F.R.D. 472, 498-500
(EDNY 1968). We, of course, express no opinion on the proper
allocation of the cost of notice in such cases.
[
Footnote 16]
The record does not reveal whether a smaller class of odd-lot
traders could be defined, and if so, whether petitioner would be
willing to pay the cost of notice to members of such a class. We
intimate no view on whether any such subclass would satisfy the
requirements of Rule 23. We do note, however, that our dismissal of
the class action as originally defined is without prejudice to any
efforts petitioner may make to redefine his class either under Rule
23(c)(4) or Fed.Rule Civ.Proc. 15.
MR. JUSTICE DOUGLAS, with whom MR. JUSTICE BRENNAN and MR.
JUSTICE MARSHALL concur, dissenting in part.
While I am in general agreement with the phases of this case
touched on by the Court, I add a few words because its opinion does
not fully explore the issues which will be dispositive of this case
on remand to the District Court.
Federal Rule Civ.Proc. 23(c)(4) provides:
"When appropriate, (A) an action may be brought or maintained as
a class action with respect to particular issues, or (B) a class
may be divided into subclasses and each subclass treated as a
class, and the provisions of this rule shall then be construed and
applied accordingly. "
Page 417 U. S. 180
As Judge Oakes, speaking for himself and Judge Timbers, said
below:
"The plaintiff class might, for example, be divided into much
smaller subclasses . . . of odd lot buyers for particular periods,
and one subclass treated as a test case, with the other subclasses
held in abeyance. Individual notice at what would probably be a
reasonable cost could then be given to all members of the
particular small subclass who can be easily identified."
479 F.2d 1005, 1023 (dissenting from denial of rehearing en
banc).
Or a subclass might include those on monthly investment plans,
or payroll deduction plans run by brokerage houses. [
Footnote 2/1] The possibilities, though not
infinite, are numerous.
Page 417 U. S. 181
The power to create a subclass is clear and unambiguous. Who
should be included and how large it should be are questions that
only the District Court should resolve. Notice to each member of
the subclass would be essential under Rule 23(c)(2); and under Rule
23(c)(2)(A), any notified member may opt out. There would remain
the question whether the subclass suit is manageable. But since the
subclass could be chosen in light of the nonmanageability of the
size of the class whose claims are presently before us, there is no
apparent difficulty in that sense.
The statute of limitations, it is argued, has run or is about to
run on many of these classes. We held in
American Pipe &
Construction Co. v. Utah, 414 U. S. 538,
that the start of a class action prior to the running of the
statute protects all members of the class. Whether that rule should
obtain for the benefit of other members who could have been
included in the subclass bringing suit, but for the manageability
issue, is a question we have not decided. [
Footnote 2/2] Moreover, if the subclass sues and wins
or
Page 417 U. S. 182
sues and loses, questions covering the rights of members of the
larger class who are not parties would be raised. These are
questions we have not answered. [
Footnote 2/3] But the fact that unresolved questions of
law would remain is not an insurmountable obstacle, and Rule
23(c)(4)(B) expressly authorizes subclasses to sue in lieu of a
full class. Rule 23(c)(4)(B) may have had, as a forerunner, the
proposal stated by Judge Weinstein in 1960:
"When there is a question of law or fact common to persons of a
numerous class whose joinder is impracticable, one or more of them
whose claims or defenses are representative of the claims or
defenses of all and who will fairly and adequately protect the
interests of all may sue or be sued on behalf of all. [
Footnote 2/4]"
In explanation he added:
"Such a rule would provide six requirements for a class action:
(1) a class, (2) numerous members,
Page 417 U. S. 183
(3) common question of law or fact, (4) impracticability of
joinder, (5) representative claim or defense, (6) fair and adequate
protection of absentees."
"Almost any 'bond of association' in an event or status out of
which a legal dispute arose is sufficient to constitute a class.
The class must be numerous, but need not be so large that, in
itself, this factor makes it impracticable to bring them all before
the court. A number of members sufficient to satisfy present
Section 195 [of the New York Civil Practice Act] would satisfy the
proposed rule. Size, modesty of monetary interest, inability to
locate members and difficulty of obtaining jurisdiction should all
be considered in determining impracticability of joinder. [
Footnote 2/5]"
The Court permits Eisen to redefine his class either by amending
his complaint pursuant to Fed.Rule Civ.Proc. 15 or by proceeding
under Rule 23(c)(4). While Eisen may, of course, proceed by
amending his complaint to define a subclass, it is clear that he
need not do so. [
Footnote 2/6]
Definition of the subclass would properly be accomplished by order
of the District Court, as permitted by Rules 23(c)(4) and 23(c)(1),
without amendment of the complaint as filed. While the complaint
alleges that
Page 417 U. S. 184
Eisen sues on his behalf and on behalf of all purchasers and
sellers of odd lots, it adds, "Plaintiff will fairly insure the
adequate representation of all such persons." Problems of
manageability covered by Rule 23(b)(3)(D) arise only after issues
are joined and the District Court is engaged in shaping up the
litigation for a trial on the merits. If it finds that a subclass
would be more appropriate, no new action need be started, nor any
amended complaint filed.
Rule 23(c)(1) provides:
"As soon as practicable after the commencement of an action
brought as a class action, the court shall determine by order
whether it is to be so maintained. An order under this subdivision
may be conditional, and may be altered or amended before the
decision on the merits."
It is as plain as words can make it that the court which decides
that a full class action can be maintained can alter or amend its
order "before the decision on the merits." One permissible way in
which the court's order may be changed is to have it "altered" as
provided in Rule 23(c)(1) by reducing the larger class to a
subclass as provided in the same subsection -- Rule 23(c)(4)(b).
The prerequisites of a class cause of action are described in Rule
23(a). In the instant case, that hurdle has been passed, and we are
at the stage of notice requirements and manageability. Not an iota
of change is made in the cause of action by restricting it to a
subclass.
The purpose of Rule 23 is to provide flexibility in the
management of class actions, with the trial court taking an active
role in the conduct of the litigation.
See Dolgow v.
Anderson, 43 F.R.D. 472, 481-482 (EDNY);
Green v. Wolf
Corp., 406 F.2d 291, 298 (CA2),
cert. denied, 395
U.S. 977. Lower federal courts have recognized their discretion to
define those subclasses proper to prosecute an action without being
bound by the plaintiff's
Page 417 U. S. 185
complaint.
See, e.g., Dolgow v. Anderson, supra at
491-493; Philadelphia Elec. Co. v. Anaconda American Brass Co., 43
F.R.D. 452, 462-463 (ED Pa.).
See generally 7A C. Wright
& A. Miller, Federal Practice and Procedure § 1790, p. 187; 3B
J. Moore, Federal Practice � 23.65. And, as Rule 23(c)(1) clearly
indicates, the courts retain both the power and the duty to realign
classes during the conduct of an action when appropriate.
See,
e.g., Carr v. Conoco Plastics, Inc., 423 F.2d 57, 58 (CA5),
cert. denied, 400 U.S. 951;
Johnson v. ITT-Thompson
Industries, Inc., 323 F.
Supp. 1258, 1262 (ND Miss.);
Ostapowicz v. Johnson Bronze
Co., 54 F.R.D. 465, 466 (WD Pa.);
Baxter v. Savannah Sugar
Refining Corp., 46 F.R.D. 56, 60 (SD Ga.). That discretion can
be fully retained only if the full-class complaint is preserved
when a subclass is defined to prosecute the action. The bounds of
the subclass can then be narrowed or widened by order of the
District Court as provided in Rule 23(c)(1), without need to amend
the complaint and without the constraints which might exist if the
complaint had earlier been amended pursuant to Rule 15 to include
only the subclass.
I agree with Professor Chafee that a class action serves not
only the convenience of the parties, but also prompt, efficient
judicial administration. [
Footnote
2/7] I think in our society that is growing in complexity there
are bound to be innumerable people in common disasters, calamities,
or ventures who would go begging for justice without the class
action but who could with all regard to due process be protected by
it. Some of these are consumers whose claims may seem
de
minimis but who, alone, have no practical recourse for either
remuneration or injunctive relief. Some may be environmentalists
who have no photographic development plant about to be ruined
because of
Page 417 U. S. 186
air pollution by radiation, but who suffer perceptibly by smoke,
noxious gases, or radiation. Or the unnamed individual may be only
a ratepayer being excessively charged by a utility, or a homeowner
whose assessment is slowly rising beyond his ability to pay.
The class action is one of the few legal remedies the small
claimant has against those who command the
status quo.
[
Footnote 2/8] I would strengthen
his hand with the view of creating a system of law that dispenses
justice to the lowly as well as to those liberally endowed with
power and wealth.
[
Footnote 2/1]
The parties and courts below concentrated on whether a class
action could be sustained on behalf of all six million odd-lot
investors, so that the record is limited in information bearing on
what manageable subclasses could be created.
There is, nonetheless, indication that certain subclasses might
be economically manageable. Counsel for respondent Carlisle &
Jacquelin stated in oral argument before the Court of Appeals that
100,000 shareholders participate in his client's Monthly Investment
Plan, and that Carlisle & Jacquelin corresponds with those
investors. Merrill Lynch corresponds with 150,000 people
participating in a payroll deduction investment plan. Whether Eisen
or any other plaintiff who may come forward to intervene fits in
such a subclass we do not know. But if brokerage houses correspond
regularly in the course of business with such odd-lot investors,
the marginal cost of providing the individual notice required by
Rule 23(c)(2) might be nothing more than printing and stuffing an
additional sheet of paper in correspondence already being sent to
the investor, or perhaps only programing a computer to type an
additional paragraph at the bottom of monthly or quarterly
statements regularly mailed by the brokers.
A subclass of those who had engaged in numerous transactions
might also be defined, so that the recovery per class member might
be large enough to justify the cost of notice and management of the
action. A survey of only four of 14 wire firms revealed 2,000
customers with 10 or more transactions between 1962 and 1966. 52
F.R.D. 253, 259, 267, and n. 10.
By defining more definite subclasses such as those discussed,
moreover, the problems inherent in distributing an eventual
judgment would be reduced. Class members would be more readily
identifiable, with more readily accessible transaction records and
individually provable damages.
[
Footnote 2/2]
In this case, the entire class was defined in the original
complaint, and the defendants were put on notice within the period
of limitation of their potential liability, serving the purpose of
the statute of limitations even if the substantive merits were
eventually to be prosecuted in the form of a subclass action with
the class action held in abeyance.
"Within the period set by the statute of limitations, the
defendants have the essential information necessary to determine
both the subject matter and size of the prospective litigation,
whether the actual trial is conducted in the form of a class
action, as a joint suit, or as a principal suit with additional
intervenors."
American Pipe & Construction Co. v. Utah,
414 U. S. 538,
414 U. S. 555.
And see Wheaton, Representative Suits Involving Numerous
Litigants, 19 Cornell L.Q. 399, 423 (1934).
[
Footnote 2/3]
If the subclass lost, it is argued that other investors not
members of that subclass could not be precluded from prosecuting
successful suits of their own, since they had never had their day
in court or necessarily even been apprised of the subclass' action.
See Hansberry v. Lee, 311 U. S. 32; F.
James, Civil Procedure § 11.26 (1965); 1B J. Moore, Federal
Practice � 0.411[1] (1974). If the subclass won, strict application
of the doctrine of mutuality of estoppel would limit the usefulness
of that subclass victory in suits brought by investors not members
of that subclass.
See generally F. James,
supra,
§ 11.31; 1B J. Moore,
supra, �0.41[1] (and Supp 1973), and
cases cited therein.
And see Vestal, Preclusion/Res
Judicata Variables: Parties, 50 Iowa L.Rev. 27, 55-59 (1964); Note,
35 Geo.Wash.L.Rev. 1010 (1967); Currie, Mutuality of Collateral
Estoppel: Limits of the
Bernhard Doctrine, 9 Stan.L.Rev.
281 (1957).
[
Footnote 2/4]
Weinstein, Revision of Procedure: Some Problems in Class
Actions, 9 Buffalo L.Rev. 433, 458.
[
Footnote 2/5]
Id. at 45859 (footnotes omitted).
[
Footnote 2/6]
Were Eisen to be remitted to an individual action, as he would
be if he refused to pay the cost of notice even to a subclass,
amendment of the complaint might be called for by the District
Court. Under Rule 23(d)(4), the District Court may in some
instances require that pleadings be amended to eliminate class
allegations. The Advisory Committee Notes indicate that this
provision is to be applied only when a suit must proceed as a
nonclass, individual action, not when, as here, an appropriate
class exists and the action must be prosecuted in the first
instance by a subclass only because of problems of manageability.
See 28 U.S.C.App. p. 7767.
[
Footnote 2/7]
Z. Chafee, Some Problems of Equity 149 (1950).
[
Footnote 2/8]
Judge Weinstein writing in the N.Y. Law Journal, May 2, 1972, p.
4, col; 3, said:
"Where, however, public authorities are remiss in performance of
this responsibility for reason of inadequate legal authority,
excessive workloads or simple indifference, class actions may
provide a necessary temporary measure until desirable corrections
have occurred. The existence of class action litigation may also
play a substantial role in bringing about more efficient
administrative enforcement and in inducing legislative action."
"The matter touches on the issue of the credibility of our
judicial system. Either we are committed to make reasonable efforts
to provide a forum for adjudication of disputes involving all our
citizens -- including those deprived of human rights, consumers who
overpay for products because of antitrust violations and investors
who are victimized by insider trading or misleading information --
or we are not. There are those who will not ignore the irony of
courts ready to imprison a man who steals some goods in interstate
commerce while unwilling to grant a civil remedy against the
corporation which has benefited, to the extent of many millions of
dollars, from collusive, illegal pricing of its goods to the
public."
"When the organization of a modern society, such as ours,
affords the possibility of illegal behavior accompanied by
widespread, diffuse consequences, some procedural means must exist
to remedy -- or at least to deter -- that conduct."