Informal Opt Outs: Must Reasonably Indicate Intent to Opt Out and Notice Can be Imputed

Informal Opt Outs:

 Must Reasonably Indicate Intent to Opt Out and Notice Can be Imputed

In Re: Deepwater Horizon

By: Bryan O’Neill

Seacor Holdings Inc. v. Mason, No. 15-30597, 2016 U.S. App. LEXIS 6309, 2016 WL 1376207 (5th Cir. April 6, 2016)

Seacor Holdings, Inc. (Seacor) owned a vessel that assisted in the extinguishment and cleanup efforts of the DEEPWATER HORIZON explosion and oil spill. Duwayne Mason, an employee of Seacor and member of the crew, filed a claim in Seacor’s limitation action for injuries due to exposure to chemicals, smoke, heat, and other noxious by-products.This case arose out of the Medical Benefits Settlement Agreement (Agreement) that BP negotiated based on pleading bundles B3 (which included claims related to cleanup efforts) in the DEEPWATER HORIZON multidistrict litigation (MDL). The Agreement specifically identified Seacor as a released party. The district court approved the agreement and set up the procedure for individuals to opt out of the class.Mason moved to sever his claims from the MDL several months before the opt out period closed. Seacor opposed the motion, over a month before the opt out period expired, contending that Mason’s claims fell within the B3 bundle and agreement. The court denied Mason’s motion after the opt out period ended. Seacor moved for summary judgment on Mason’s claims and the district court granted the motion holding Mason was a member of the class.The first issue on appeal was the standard of review, as Mason contended the standard of review was unclear for a “non-formal” opt out attempt. The court held that the review is for an abuse of discretion. Mason appealed maintaining that his motion to sever was sufficient to opt out of the Agreement. While case law suggests that an opt out does not have to be in the form determined by the district court or settlement agreement, the court determined that Mason’s conduct “resemble[d] an after-the-fact attempt to depict completely distinct litigation conduct in another sphere as expressing a desire to opt out.” The court noted that the reason opt outs need not perfectly conform to the designated procedures is because of a desire not to require class members to have to get an attorney and submit a formal legal document. The court further noted that there are no exact requirements for an informal opt out; but other courts have determined that reasonableness is key. The court held “that the district court did not abuse its discretion in determining that Mason’s conduct did not reasonably indicate a desire to opt out of the Medical Benefits Settlement Class.”Mason further contended that the notice of the Agreement was inadequate on constitutional grounds. The court noted that “the Eleventh Circuit has held that ‘[a]bsent class members can collaterally challenge the res judicata effect of a prior class judgment . . . because there was not adequate notice . . . .” Juris v. Inamed Corp., 685 F.3 1294, 1323-13 (11th Cir. 2012). The court determined that Mason was not an absent class member because his attorney had actual notice of the Agreement. That notice to his attorney was imputed to him which satisfied due process.The court affirmed the district court’s grant of summary judgment in favor of Seacor along with the denial of Mason’s motion to be recognized as a class member who opted out of the class action settlement.