The opinion of the court was delivered by: Royce C. Lamberth United States District Judge
This matter comes before the Court on plaintiffs' motion for a preliminary injunction [1534-2], which was filed on September 20, 2002, and other related motions. During oral argument, this Court directed both parties to prepare supplemental briefs on the issues raised by plaintiffs' motion. Those briefs have been filed with the Court. In their supplemental reply brief [1651-1], plaintiffs amended their motion to include an alternative request for entry of an order under Rule 23(d) of the Federal Rules of Civil Procedure. *fn1 Upon consideration of plaintiffs' motion, the opposition thereto, defendants' reply brief, the oral arguments of counsel, the supplemental briefs filed by the parties, and the applicable law, the Court finds that entry of an order under Federal Rule of Civil Procedure 23(d) is appropriate at this time.
On March 1, 2000, defendants moved for entry of an order by this Court in conjunction with a public administrative process that defendants planned to hold. Because the administrative process involved a series of public meetings at which class members in this litigation would be afforded an opportunity for notice and comment, defendants requested an order finding that any communications between defendants (or their counsel) and class members that occurred in the course of this administrative process would not violate ethical rules prohibiting attorney contacts with represented parties. This Court granted defendants' motion in an order filed on March 28, 2000. In that order, the Court explained that although it found that the communications that defendants anticipated would occur during the administrative process would not contravene the applicable ethical rules, it would "make no ruling at this time on any other legal question presented by [defendants'] Proposed Notice."
On December 11, 2001, defendants filed an emergency motion for entry of an order by this Court clarifying the ethical obligations of their attorneys in conjunction with another public administrative process that defendants planned to hold. The Court granted defendants' motion the following day. *fn2
On September 10, 2002, in a motion filed with this Court, defendants announced that they were preparing to send historical statements of account to nearly eight thousand individual Indian account holders, among which were class members in this litigation. Defendants did not seek prior authorization from the Court regarding these communications with class members. In response, plaintiffs moved for a temporary restraining order and preliminary injunction barring defendants from sending the historical statements of account to the individual Indian account holders without first obtaining permission from this Court. On October 9 and 28, 2002, while these motions were pending before the Court, defendants mailed historical statements of account to approximately 1200 individual account holders. A cover letter mailed with each of the statements contained the following language:
If you have concerns about the Historical Statement of Account included with this letter or if you believe it is in error, you may wish to file a challenge with OHTA [the Office of Historical Trust Accounting]. . . . . If you do not challenge the historical account statement or request an extension within 60 calendar days of the postmark on the envelope containing this letter, the enclosed Historical Statement of Account will be final and cannot be appealed. . . . You may appeal OHTA's final response to the Interior Board of Indian Appeals (IBIA) by filing a Notice of Appeal with IBIA within 30 calendar days of the date you receive OHTA's response. [emphasis in original].
On October 10, 2002, plaintiffs filed a request for referral of defense counsel to the disciplinary panel of this Court for violation of attorney ethics rules. On November 1, this Court heard oral arguments from counsel on the issues raised by plaintiffs' motion for a preliminary injunction, and ordered both parties to file supplemental briefs with the Court. Defendants filed their supplemental brief on November 15, 2002. Plaintiffs filed a brief in opposition thereto on December 2, 2002 renewing their request for a preliminary injunction and, in the alternative, for an order from this Court under Rule 23 of the Federal Rules of Civil Procedure. Defendants filed their reply brief on December 9.
A. Plaintiffs' Request for an Order Pursuant to Rule 23(d) of the Federal Rules of Civil Procedure
The premiere treatise on class actions speaks directly to the issue now before the Court: After a court has certified a case as a class action and the time for exclusions has expired, the attorney for the named plaintiff represents all class members who are otherwise unrepresented by counsel. Defense counsel must observe the rules of ethical conduct in these circumstances and communicate with the opposing parties through their attorney, who is counsel for the class. . . .
The court may allow the defendant to communicate with actual class members in the ordinary course of business, as long as the communications do not relate to the claims involved in the litigation. . . . Furthermore, [the] defendant may not attempt to solicit dismissals with prejudice, releases, or covenants not to sue from individual members of the existing class after the class has been certified and the time for exclusion has expired, except under conditions specified by the court to protect the rights of absent class members. 3 NEWBERG ON CLASS ACTIONS § 15.18 (3d ed. 1992).
The statements mailed by defendants to individual class members have the effect of extinguishing the class members' rights to a full and accurate accounting after defendants have "fixed the system." The entitlement of class members to such an accounting is the subject of Phase II of current litigation. Because of the wording in the notices included in the statements, any ruling by this Court following Phase II will not apply to the class members who have received these statements because the statements purport to be final and non-appealable historical statements of account. In effect, these members will be involuntarily opted out of Phase II of this litigation, because they will not receive the benefits of any remedy that might be ordered. It is thus difficult for this Court to imagine a form of communication that would relate more directly to the claims involved in this litigation. However, in none of the briefs that defendants have filed with this Court is there any attempt to defend the proposition that defendants may engage in communications that purport to extinguish the rights of class members. Defendants also fail to explain why they failed to seek prior authorization from this Court to engage in communications with class members, as they did when this issue arose in 2000 and 2001. *fn3
There is no apparent support in the available case law that permits an opposing party to engage in communications with class members that have the effect of extinguishing the rights of those class members. For example, in Kleiner v. First Nat'l Bank of Atlanta, 751 F.2d 1193 (11th Cir. 1985), while the issue of unsupervised contacts by the defendant bank with putative class members was pending before the district court, the bank contacted over 3000 of its customers urging them to opt out of the litigation. Id. at 1197-98. The district court found the decisions of the putative class members to opt out to be voidable, id. at 1199, and entered an order proscribing either party from discussing the issues involved in the case with class members, although it permitted the bank to engage in ordinary business affairs with its clients who were putative class members. Kleiner v. First Nat'l Bank of Atlanta, 99 F.R.D. 77, 79 (N.D. Ga. 1983).
The Eleventh Circuit held that the district court had "ample discretion" under Rule 23 of the Federal Rules of Civil Procedure to enter such an order. Kleiner, 751 F.2d at 1203. The court also concluded that the order complied with the dictates of the First Amendment:
The trial court's order was narrowly drawn to avoid suppressing utterances worthy of first amendment protection. As a directive addressed to counsel for the Bank, the ambit of the order was restricted to communications regarding the litigation. The order thus did not impinge on the Bank's ability to speak with ...