Schwarzschild

Opinion by Judge REINHARDT; Dissent by Judge NOONAN.

We consider here a narrow question of procedure involving notices in class action cases. We must decide whether a defendant who has succeeded in obtaining summary judgment may subsequently compel the named plaintiff to give the class the Rule 23(c)(2) notice that is ordinarily given shortly after class certification, or whether by obtaining judgment before the notice is given the defendant has waived any right to have notice sent to the purported class members.

I.

Richard T. Sehwarzschild [plaintiff] sued Bernard K. Tse, et al. [defendants], for violations of Sections 13(e) and 14(e) of the Securities and Exchange Act, as well as for violations of the California Corporations Code. Plaintiff filed his claim in January of 1990. In July of that year, he moved for class certification. The district court granted the motion to certify on October 24th, 1991 and denied the defendants’ subsequent motion for reconsideration in July of 1992.

On October 9th, 1992, defendants filed a motion for summary judgment and a motion to decertify the class. On the same day, plaintiff filed a motion for an order approving class notice. On December…

dissenting:

The court suggests that the sole purpose of Rule 23(c)(2) is to prevent one-way intervention by plaintiffs when judgment against a defendant has been granted. The rule, however, is intended to protect the due process rights of potential class members. See Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 173-74 , 94 S.Ct. 2140, 2150-51 , 40 L.Ed.2d 732 (1974) (citing Advisory Committee’s Note to Rule 23). The opinion’s “waiver” rationale is puzzling in this context. The reasoning is based on the notion that a defendant has a right to send class notice. Rule 23(c)(2), however, gives potential class members a right to receive individual notice upon the court’s direction. Correlative to this right is a duty imposed on the class representative to send the class the appropriate notice. The opinion transforms this duty to the class into a right of the defendant to have such notice sent. *298 This view is unsupported by Rule 23(e)(2), which imposes a requirement of notice to the class members but does not mention any right of the opposing party to have notice sent.

The court, however, goes on to suggest that the language of Rule 23(c)(2) supports its view because the rule only…