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ZIMMER PAPER PRODS. v. BERGER & MONTAGUE

May 30, 1984

ZIMMER PAPER PRODUCTS INCORPORATED,
v.
BERGER & MONTAGUE, P.C., et al.



The opinion of the court was delivered by: POLLAK

 LOUIS H. POLLAK, District Judge.

 Plaintiff in this case, Zimmer Paper Products, Inc. ("Zimmer"), belonged to the plaintiff class in Glassine and Greaseproof Paper Antitrust Litigation, Master File No. 80-914, M.D.L. No. 475. The antitrust litigation settled. Zimmer claims that it never received a notice dated November 10, 1981, which announced the settlement of the antitrust litigation and explained the procedure for filing a claim on the settlement fund. Zimmer never filed such a claim and consequently Zimmer did not participate in the class' recovery.

 Zimmer commenced this action against the antitrust litigation class' counsel and the antitrust litigation representative plaintiffs. Zimmer sought to recover the amount that it would have recovered from the settlement fund on a variety of theories. Zimmer contended that the class representatives and their attorneys bore responsibility for Zimmer's alleged failure to receive the November 10, 1981, notice and Zimmer's alleged consequent failure to file a claim.

 By Order dated August 2, 1983, I dismissed all claims against the class representatives "because there is no viable theory supporting imposition of civil liability on the named class representatives. . . ." Order para. 2 (Aug. 2, 1983). I also dismissed all claims against the attorney defendants other than a claim that the attorney defendants "negligently failed to carry out the proper procedures in mailing the notice first class." Id. para. 4. I held that "first class mailing is sufficient to satisfy the notice requirement of Federal Rule of Civil Procedure 23(e). . . ." Id. para. 3.

 On August 3, 1983, plaintiff filed "Count II," essentially an amendment to its complaint. Count II asserted a claim against the attorney defendants for failure to mail the November 10, 1981, notice with or without negligence. Relying on Trist v. First Federal Savings & Loan, 89 F.R.D. 1 (E.D. Pa. 1980), I dismissed Count II. I again held that "plaintiff may only recover if it demonstrates that defendants negligently failed to mail notice to plaintiff." Order at 3 (October 6, 1983).

 Discovery proceeded in this matter through the autumn and winter of 1983. In December, defendants moved for summary judgment for three reasons. First, defendants asserted that plaintiff had adduced no evidence of defendants' negligence while defendants had adduced evidence of their own due care. Second, defendants claimed that plaintiff had adduced no evidence that any negligence of defendants' caused plaintiff to fail to file a notice of claim while defendants had adduced evidence suggesting that no causation existed. Third, defendants contended that publication of notice of the settlement in the Wall Street Journal insulated them from liability.

 On May 27, 1984, I ruled that the last of these three grounds for summary judgment was legally insufficient:

 
Notice by publication suffices for class members whose notice "falls through the figurative crack. . . ." Trist v. First Federal Savings & Loan, 89 F.R.D. 1, 3 (E.D.Pa.1980) (perfect mailing not required to bind class members). However, notice by publication does not insulate the class' attorney from liability for negligent mailing. To hold that publication sufficed in the face of negligent mailing would be to deny the teaching of Mullane v. Central Hanover Bank & Trust, 339 U.S. 306 [70 S. Ct. 652, 94 L. Ed. 865] (1970), that notification of class members must comport with due process protections. The Supreme Court has specifically held that due process requires mailing, and not mere publication, when the notifier knows the address of the person entitled to notice. Mennonite Board of Missions v. Adams, [462 U.S. 791] 103 S. Ct. 2706 [77 L. Ed. 2d 180] (1983). Due process may not exact a guarantee that the mailing process be perfect, but it does not tolerate a negligent mailing process. For this reason, the fact of proper publication in the Wall Street Journal of itself does not entitle defendants to summary judgment.

 Memorandum/Order at 2-3 (March 27, 1984); see also Walsh v. Great Atlantic & Pacific Tea Co., Inc., 726 F.2d 956, 962-964 (3d Cir.1983). As to negligence and causation, however, I held on March 27, that plaintiff had not properly responded to defendants' motions under Rule 56(e). I therefore granted plaintiff additional time to present evidence that indicated the existence of a material issue of fact concerning defendants' negligence and the existence of a causal relationship between that asserted negligence and Zimmer's failure to file a claim in the antitrust litigation.

 The parties do not dispute that defendants delegated the tasks involved in printing and mailing the November 10, 1981, notice. Provcor Services, Inc. ("Provcor") performed some functions as did VPI Reproduction Center, Inc. ("VPI"). VPI in turn subcontracted most of its responsibilities to Fischler's Printing & Office Products ("Fischler"). Zimmer has not adduced any evidence, nor does it contend, that any of these entities was an inappropriate choice for the preparation of notices and mailing labels or for the task of mailing the notices.

 The parties do not dispute that Provcor prepared a set of gum-backed mailing labels which Provcor turned over to VPI. The parties do not dispute that VPI made accurate copies of these mailing labels which VPI gave to defendants who in turn filed the copies with the court. One such accurate copy shows four labels addressed to Zimmer's Indianapolis office and three addressed to Zimmer's South San Francisco office. Goff Affidavit, exh. K, labels 3709-3716.

 The parties do not dispute that a large number of notices were mailed by Provcor. 2928 should have been mailed, but the Postal Service receipted for 3000. In any event, the parties do not dispute that most of the notices intended to be sent were in fact mailed.

 The parties do not dispute that at least some labels in the near proximity of the Zimmer labels were affixed to notices and properly mailed. Zenith Specialty Bag Co. (label 3702) and Zorn Packaging Inc. (label 3723) filed claims in the ...


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