Which communications to prospective class members in a North Carolina class action must carry the 'This is an advertisement for legal services' disclaimer?

Plain-English summary

A lawyer represents 65 plaintiffs in an uncertified class action and expects roughly 250 unknown North Carolina class members whose names and addresses will come through discovery. The opinion sorts three categories of communications to prospective class members and asks which need the Rule 7.3(c) disclaimer.

On the categories, the opinion concludes that the first, a notice from the court informing prospective members of the certified action and their right to opt out, does not require the disclaimer because it is a communication by the court, authorized by law, and not a lawyer's solicitation (Rule 7.2, cmt. [4]). The second, informal communications between litigants' counsel and prospective members necessary to represent the parties, does not solicit employment and so is not covered by Rule 7.3. The third, a written communication asking a prospective member whether to hire the lawyer's firm or to expand the paying class representatives, is a solicitation of persons known to need particularized legal services and must carry "This is an advertisement for legal services" on the envelope and at the start of the letter.

On the lawyer's planned mass mailing, the opinion concludes it must include the disclaimer unless the court authorizes otherwise. Although the letter would also inform members of the action and seek discoverable information, it includes a solicitation component (asking whether they want to hire the firm and share litigation costs) and is sent to persons known to be in need of particularized legal services, so Rule 7.3(c) applies.

In practice

Under the North Carolina rules as they stood at the time of the opinion, the analysis turns on whether a communication solicits professional employment. The opinion holds that court notices and informal litigation communications fall outside Rule 7.3(c), while a lawyer's letter seeking to be hired or to add paying class representatives is a solicitation requiring the disclaimer.

Per the opinion, a single mailing that mixes informational and solicitation purposes is treated as a solicitation and must carry the disclaimer unless the court authorizes a different approach.

Common questions

Q: Does a court-issued class-action notice need the advertising disclaimer?

A: No. The opinion concludes it is a court communication authorized by law and not a lawyer's solicitation, so Rule 7.3(c) does not apply.

Q: Do informal communications between counsel and prospective class members need the disclaimer?

A: No. The opinion concludes those communications do not solicit professional employment and are not covered by Rule 7.3.

Q: What about a letter asking prospective members to hire the firm or become paying class representatives?

A: That is a solicitation. The opinion concludes it must include "This is an advertisement for legal services" on the envelope and at the start of the letter.

Q: What if a single mailing both informs members and asks them to hire the firm?

A: The opinion concludes the mailing must carry the disclaimer, unless the court authorizes otherwise, because it includes a solicitation component aimed at people known to need particularized legal services.

Background and rules framework

The opinion interprets Rule 7.3(c) (the advertising disclaimer for targeted solicitation, corresponding to Model Rule 7.3) together with Rule 7.2 and its comment [4] (communications authorized by law, corresponding to Model Rule 7.2), applied to the three categories of class-action communications.

Citations and references

Rules of Professional Conduct:

• MR 7.3 / NC Rule 7.3(c) (advertising disclaimer on targeted solicitation)
• MR 7.2 / NC Rule 7.2, cmt. [4] (court notices and communications authorized by law)

See also

• ABA Formal Op. 07-445: Contact With Putative Class Members
• DC Bar Op. 302: Internet Solicitation, Class Actions, and Bidding Services
• NC State Bar 2006 FEO 6: Statements on a Solicitation Envelope
• ABA Formal Op. 501: Solicitation

Source

• Landing page: https://www.ncbar.gov/for-lawyers/ethics-and-governing-rules/ethics-opinions/opinions/2004-formal-ethics-opinion-5/

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Inquiry #1:

Attorney filed a class action on behalf of 65 individual plaintiffs, three of whom are designated class representatives. The class has not yet been certified by the court. Attorney believes there are unknown North Carolina class members numbering approximately 250. Through discovery, the defendants in the action will send to Attorney the names and addresses of all the prospective members of the class. Attorney will file a motion to certify the class, but he expects defendants will oppose the motion on several grounds, including the inability of the class representatives to represent adequately the prospective class.

In a class action, there are generally three categories of communications sent to prospective class members. The first type is a notice from the court, which may be drafted by the parties, informing the prospective class members of the existence and nature of the class action, that the Court has certified the lawsuit as a class action, and giving the recipients the choice to opt out of the class. If the prospective class member opts out, then he or she is free to pursue claims against the defendant individually. A second category of communications includes informal communications by the litigants' counsel with prospective class members on a wide array of topics prior to class certification. Third, plaintiffs' counsel may send a communication that asks a prospective class member if he or she wants to hire Attorney's firm or seeks to expand the number of class representatives that may share in the cost of litigation.

Must any of the above communications with prospective members of a class action include the statement "This is an advertisement for legal services" pursuant to Rule 7.3(c)?

Opinion #1:

Rule 7.3(c) of the Rules of Professional Conduct requires that "[e]very written. . . communication from a lawyer soliciting professional employment from a prospective client known to be in need of legal services in a particular matter shall include the words, 'This is an advertisement for legal services' on the outside of the envelope. . . and at the beginning of the body of the written or recorded communication."

As set forth in the inquiry, the first type of communication is a notice from the court to class members. This notice need not include the advertising disclaimer because it is a communication by the court, is authorized by law, and is not a solicitation by a lawyer. See Rule 7.2, cmt. [4]. The second category of communications are those typically associated with class action litigation and necessary for counsel on both sides to adequately represent the interests of the parties. These communications do not solicit professional employment, and therefore are not covered by Rule 7.3 either. The third type of communication with prospective class members is a written solicitation by a lawyer to persons known to be in need of particularized legal services, and must contain the words "This is an advertisement for legal services" on the outside of the envelope and at the beginning of the body of the communication. Rule 7.3(c).

Inquiry #2:

Attorney plans to send out a mass mailing to prospective class members early in the litigation. The notice from the court advising prospective class members of their rights due to class certification has not been sent as of yet. Attorney would like to send his own letter (1) to inform prospective class members of the class action, (2) to find out whether the prospective class members have discoverable information which may be helpful to the litigation, and (3) to determine whether the prospective class members want to hire Attorney's firm and to share in the cost of litigation as a class representative. Attorney is concerned that if he includes the language "This is an advertisement for legal services" on the outside of the envelope, prospective class members may discard the letter without opening it.

Must this communication with prospective members of a class action include the statement "This is an advertisement for legal services" pursuant to Rule 7.3(c)?

Opinion #2:

Yes, unless otherwise authorized by the Court. It is clear from the facts presented, that Attorney's mailing to prospective class members includes a solicitation component, and that the notice will be sent to persons known to be in need of particularized legal services. Rule 7.3(c).