A federal judge in Wisconsin recently underscored the importance of thoughtful email design when settling parties employ electronic notice. In Powers v. Filters Fast, LLC, No. 20-cv-982 (W.D. Wis. Feb. 24, 2022), ECF No. 65, the parties gave notice of a class action settlement through emails that used a generic subject line (“Legal Notice”) and an ambiguous sending address (“noreply[@]hcgsettlements.com”). The court found that these features created a risk that class members would mistake the notice for spam, and thus “would deter rather than facilitate a high response rate from class members.” Id. at 3. In light of these issues, the court postponed the scheduled final approval hearing and ordered the parties to “cure the notice defects.” Id. at 1.
The notice defects in Powers came to light after the court requested information explaining the unexpectedly low claims rate. The class includes approximately 323,000 individuals potentially affected by a website data breach, and the parties’ settlement “allowed each class member to submit a claim for $25 without showing any individualized injury.” Id. at 1-2. When only 3,740 individuals filed claims—a response rate of “a little over one percent”—the court asked the plaintiffs to file a copy of the “actual emails that the administrator sent to the class.” Id. at 2. Although the court had previously reviewed the body of the notice emails in connection with plaintiffs’ motion for preliminary approval, focus only turned to the notice’s subject line and sending address for the first time during this post-notice analysis.
Powers demonstrates that settling parties must carefully consider all details of an electronic notice plan. Ideally, an electronic notice of settlement should include clear subject lines and informative sending addresses so that class members can distinguish them from spam or malicious emails. As Powers illustrates, failing to consider these details in advance can generate delays in finalizing the settlement and additional notice costs.