Reach of the Standard

Reach of the Standard

Mullane’s notice standard governs one kind of event, a court decision that will bind, and Texaco, Inc. v. Short draws the boundary. Mullane called notice reasonably calculated to apprise interested parties an elementary requirement of due process in “any proceeding which is to be accorded finality,” and Texaco read that language to apply Mullane’s standards to an “adjudication” that is “to be accorded finality.”¹ The demand for notice therefore attaches when a court issues a decision that will bind the person affected and close off later challenge. Texaco added that Mullane itself had set apart the situation in which a state enacts a general rule of law governing the abandonment of property.²

The boundary follows from what notice does. Notice lets a person respond to a decision that is about to bind, so it matters where a tribunal is preparing to act against an identifiable interest. A statute that operates by its own terms leaves no pending proceeding to answer, and the people it governs are protected by publication of the law, which lets them learn what it requires and arrange their affairs. Texaco relied on the principle that laws must give a person of ordinary intelligence a reasonable opportunity to know what is prohibited, and it observed that no one has ever suggested that each citizen must receive specific notice of what a new statute does to that citizen’s property before the statute may take effect.³ Publication thus serves the rule that governs everyone, and Mullane notice serves the decision that binds someone.

One statute can fall on both sides of the line. Its automatic operation owes no individualized notice, but the judgment that confirms its effect in a particular case does, since Texaco was clear that a judgment conclusively determining the consequence, such as one in a quiet title action, requires the full protections of the Due Process Clause, including notice reasonably calculated to reach all interested parties and a prior opportunity to be heard.⁴ Self-executing statutes show the line most sharply. Class actions show how the standard travels when a judgment will bind many people who are not individually before the court.

Self-Executing Statutes

Texaco, Inc. v. Short held that Mullane’s notice standard governs an adjudication that will be accorded finality and does not govern the self-executing operation of a general rule of law.⁵ The statute was Indiana’s Dormant Mineral Interests Act. A mineral interest unused for 20 years was deemed abandoned and reverted to the surface owner unless the mineral owner filed a statement of claim, and the Act allowed a two-year grace period.⁶ Mineral owners whose interests lapsed raised two objections. Indiana had not adequately told them of the new requirements, and an interest could not be extinguished unless the surface owner first warned the mineral owner that the 20-year period was about to expire.⁷ The Court took the objections separately and found neither meritorious.

The first objection asks how a legislature must tell citizens about a new rule. Generally a legislature need do nothing more than enact and publish the law and give the citizenry a reasonable opportunity to learn its terms and comply, and persons who own property within a State are charged with knowledge of the statutes affecting its control or disposition.⁸ The two-year grace period supplied that opportunity. The Court refused to displace hastily the legislature’s judgment, and it could not say that the statute was so unprecedented, and so unlikely to come to the attention of citizens reasonably attentive to laws affecting their rights, that two years was constitutionally inadequate.⁹

The second objection turns on whether Mullane applies at all. The Court answered by separating two events that the owners’ argument ran together: the self-executing operation of the statute, and a later judicial determination that a particular lapse occurred.¹⁰ The first happens by operation of law. If the owner made any statutory use of the interest during the 20 years, no lapse occurs, whether or not the surface owner or anyone else knows of the use, so an interest protected by one of the statute’s listed means cannot be lost for lack of notice.¹¹ When the lapse occurs, no tribunal is deciding anything about the owner, so there is no pending matter of which the owner could be told. Mullane applies to an adjudication to be accorded finality, and it had itself set apart the situation in which a State enacts a general rule of law governing the abandonment of property.¹² Laws must give a person of ordinary intelligence a reasonable opportunity to know what they require, but no one has ever suggested that each citizen must receive specific notice of what a new statute does to that citizen’s property before it takes effect.¹³

The Court likened the lapse rule to a self-executing statute of limitations. The Due Process Clause does not require a defendant to tell a potential plaintiff that a limitations period is about to run, although it would prevent the defendant from obtaining a declaratory judgment that the claim is barred without notice of that proceeding.¹⁴ The mineral owners relied on decisions requiring specific notice and a hearing before a driver’s license is suspended for failure to post security, before property is seized under a prejudgment replevin order, and before a utility ends service for nonpayment. In each of those, the interest was taken only after a specific determination that the deprivation was proper. Indiana, by contrast, had enacted a rule that applied uniformly to all citizens and fixed when an interest lapses through the owner’s inaction.¹⁵ A State that may require a mineral owner to use the interest or file a current statement of claim may also impose the lesser burden of keeping informed about the use or nonuse of the owner’s own property.¹⁶

The dissent doubted that Mullane’s reasoning about property owners could stretch this far. Mullane assumed that an owner of tangible property usually arranges to learn of a direct attack on it, but the dissent observed that when a legislature acts nothing is attacked, seized, used, or depleted, so the owner of an incorporeal interest would need a caretaker conducting daily surveillance of the state legislature.¹⁷ The majority answered that oil, gas, coal, and other minerals are interests in real estate, tangible interests that may be used and developed. The length of the nonuse period, the minimal extent of the acts that count as statutory use, and the grace period together let the State assume that an owner who does nothing has abandoned the interest.¹⁸ The Court expressly left open whether that assumption would hold for a shorter period or for an interest to which the idea of use has little meaning.¹⁹

Texaco supports that result, because it treats a judgment conclusively determining that an interest has reverted as requiring the full protections of the Due Process Clause, including notice reasonably calculated to reach all interested parties and a prior opportunity to be heard.²⁰ The rule for known parties fills in what that notice looks like. Persons whose names and addresses are known or reasonably ascertainable must be notified by the best practical means, such as mail.²¹

Tulsa Professional Collection Services, Inc. v. Pope marks the limit of the self-executing label. The executrix of an estate argued that Oklahoma’s probate nonclaim statute, which bars claims not presented within a fixed period, was a self-executing statute of limitations to which Texaco applied. The Court agreed that Texaco does not require notice of the impending expiration of a limitations period, but it rejected the premise that the nonclaim statute was such a statute.²² Nonclaim statutes share some features with limitations statutes, since both set a time within which claims must be filed and bar later ones. The State’s interest in a true self-executing limitations period is repose for potential defendants and the avoidance of stale claims, and its role ends with enactment, which generally falls short of the state action that engages the Due Process Clause.²³

The Oklahoma statute worked differently, because the court’s own proceedings set the clock. The statute became operative only after probate proceedings began, and the probate court had to appoint the executor before notice, which triggers the time bar, could be given. The statute then directed the executor to publish notice immediately after appointment, here reinforced by a court order, and copies of the notice and an affidavit of publication had to be filed with the court.²⁴ The period ran only after all of those steps, and the court was intimately involved in every one of them, which the Court treated as pervasive and substantial enough to be state action.²⁵ The governing principle follows. Where the legal proceedings themselves trigger the time bar, even if they do not resolve the claim on the merits, the bar lacks the self-executing feature that Texaco required, due process is directly implicated, and actual notice generally is required.²⁶ It is therefore irrelevant that the notice only tells creditors they may become parties, because a creditor who does not participate loses the claim to the statute.²⁷

The duty is lighter than it sounds. Actual notice to known or reasonably ascertainable creditors does not defeat the goals of a nonclaim statute, since mail is an inexpensive and efficient way to give it. The executor need make only reasonably diligent efforts to uncover creditors’ identities, publication can suffice for creditors who are not reasonably ascertainable, and a mere conjectural claim does not call for actual notice.²⁸ That is the sorting of known and unknown parties applied to an estate.²⁹

Set beside Texaco, Tulsa turns on one fact: what starts the period running. Indiana’s 20 years ran on the owner’s own nonuse, with no court or official acting. Oklahoma’s period ran only after a probate court appointed an executor and notice issued under the court’s supervision.³⁰ Both statutes ended an interest because the owner failed to act in time, so the loss itself cannot tell them apart. The State in Texaco could say its role ended with enactment and publication. The State in Tulsa could not, because the court’s proceedings were the machinery that set the clock. The Court did not decide the status of nonclaim statutes that run from the date of death and generally allow longer periods of one to five years.³¹

Class Actions and Other Settings

For a damages class certified under Rule 23(b)(3), Rule 23(c)(2) directs the court to give class members “the best notice practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort.”³³ The Advisory Committee called this notice mandatory and designed to satisfy due process, and it cited Mullane for the standard.³⁴ Rule 23(c)(2) is therefore Mullane applied to one kind of proceeding. Damages classes get mandatory notice because many of those claims are worth pursuing alone, and a member can decide whether to stay in the class or go it alone only after learning that the class action exists.³⁵

The reason lies in how a class works. An absent plaintiff need do nothing and may let the litigation run its course.³⁶ The judgment, favorable or not, binds every member who does not request exclusion.³⁷ Because silence makes a member part of the class, notice is the only way a member learns that rights are at stake and gets a chance to leave. A notice that never reaches the member turns the opt-out right into a formality.

Eisen v. Carlisle & Jacquelin tested the individual-notice command against cost. The proposed class had about 2,250,000 members whose names and addresses were easily ascertainable. The representative argued that the prohibitive cost of mailing would end the suit as a class action and that no member’s stake was large enough to make opting out worthwhile.³⁸ The Court held that individual notice to identifiable class members is an unambiguous requirement of Rule 23 that cannot be waived in a particular case, and it found nothing in the rule suggesting that notice can be tailored to the pocketbooks of particular plaintiffs.³⁹ It also rejected the argument that adequate representation can substitute for notice, because Rule 23 requires both and the argument would lead to the conclusion that no notice at all was needed.⁴⁰ The class representative bore the cost of notice.⁴¹ Eisen followed Mullane’s reasoning for known parties: once names and addresses are at hand, the reasons for resorting to means less likely than the mails to apprise members of the action disappear.⁴²

The same rule gives a different answer when the members cannot be found. re Domestic Air Transportation Antitrust Litigation involved a class of purchasers of domestic airline passenger tickets, estimated at close to 12.5 million, and the defendants conceded that their records did not show the addresses of all passengers or even list all purchasers.⁴³ The court read Rule 23 to require notice reasonably calculated to reach interested parties, with individual notice where names and addresses are known, and it found that the identity of each purchaser could not be known, at least for initial notice.⁴⁴ The plaintiffs proposed publication in a newspaper of general circulation in each of 23 hub locations and in national publications. The court recognized that giving some members notice by publication is not necessarily fatal, so long as the court balances protection of the members against keeping Rule 23 workable.⁴⁵ That is Mullane’s second route. For members no diligent effort can identify, publication can be the best practicable notice.⁴⁶

Both classes ran to millions, so size cannot be what separates Eisen from the airline case. The deciding fact is whether the members could be identified through reasonable effort. Eisen’s members could be identified from records, so mail was practicable and the cost of mailing excused nothing. The ticket purchasers could not be identified, so no mailing was possible for them and publication was the best that could be done. The rule’s word “including” shows that the two can coexist in one class, with mailed notice to the members the records reveal and published notice aimed at the rest.⁴⁷

The Constitution sets its own floor for a court that binds absent plaintiffs. In Phillips Petroleum Co. v. Shutts the Court held that a forum may bind an absent plaintiff’s claim for money damages, even without minimum contacts, if it provides minimal procedural protection.⁴⁸ The plaintiff must receive the best practicable notice, reasonably calculated under all the circumstances, describing the action and the plaintiff’s rights. The plaintiff must have an opportunity to be heard and participate, in person or through counsel, and an opportunity to opt out by returning a request for exclusion. The named plaintiff must adequately represent the absent members at all times.⁴⁹ The Court gave a reason for the lighter protection: an absent plaintiff bears fewer burdens than an absent defendant, so the Clause demands less of the forum. It therefore rejected an opt-in rule and accepted Kansas’s procedure, which mailed each member a first-class notice explaining the action and the right to exclusion.⁵⁰ Notice gives the opt-out right its content, because a member cannot choose to leave a class the member has never heard of.

Mullane notice also reaches past the opening notice in a class suit. When a class settles, Rule 23(e)(1) requires notice in a reasonable manner to all members who would be bound. The rule does not dictate method or content, so the court has discretion, subject to the due process standard of Mullane.⁵¹ Outside class actions the same standard governs agency adjudications, where the government must give notice reasonably calculated to apprise interested parties that a proceeding is pending.⁵² It also governs custody proceedings, where due process requires adequate notice and an opportunity to be heard.⁵³

On an exam, a stem describing a very large class and a representative who cannot afford to mail notice tests Eisen: cost does not excuse individual notice when the members are identifiable. A stem describing a class whose members left no names or addresses behind tests the other pole, where publication can be the best notice practicable. Neither stem is resolved by asking whether every member actually received notice, because neither Rule 23 nor the Constitution requires receipt by all members.⁵⁴