Drasc, Inc., et al. v. Navistar International Corporation, et al.
DueProcess Securities ClassAction
Federal Rule of Civil Procedure 23(c)(2)(B) mandates
that unnamed class members be given the right to "opt out"
of a class settlement after a court's preliminary approval.
To adequately protect the unnamed class members' due
process rights, courts including the Second and Tenth
Circuits follow the Reasonable Indication Standard for
determining whether a class member has sufficiently
expressed a desire to opt out. Here, the Seventh Circuit
has rejected the Reasonable Indication Standard and
replaced it with a standard that demands mechanically
rigid compliance with the district court's prescribed optout procedure. The questions presented are:
1. Does an unnamed class member who provides
reasonable indication of its intent to be excluded
from the class settlement sufficiently opt out (as
two circuits have held), or must the unnamed
class member rigidly adhere to the district
court's opt-out procedures (as one circuit has
held)?
2. Must a district court analyze an unnamed class
member's claim of excusable neglect for failing
to follow the class settlement opt-out procedure
under this Court's four-part test in Pioneer Inv.
Servs. Co. v. Brunswick Assocs. Ltd. P'ship , 507
U.S. 380, (1993)?
Does an unnamed class member who provides reasonable indication of its intent to opt out sufficiently opt out, or must the class member rigidly adhere to the opt-out procedure?