In this Emerging Issues
Analysis, author James Lawniczak examines the requirement of
"notice," which is critical in cases where there are many parties
whose interests would be affected by the relief sought -- such as in class
action and bankruptcy proceedings. In every case where the intent of court
action is to bind multiple parties, some kind of publication notice should be
considered, and usually undertaken.
Notice generally is not an
issue in traditional civil litigation. The plaintiff files suit, serves the
defendant, and the parties then participate in the litigation and are bound
through res judicata and collateral estoppel by the results thereof.
It is particularly important to carefully consider notice issues where there
are many parties whose interests would be impacted by the relief sought. This
is commonly the case in class actions and bankruptcy proceedings. For example,
debtors and trustees often seek to sell assets of the estate free and clear of
liens and claims in bankruptcy proceedings. In larger cases, there are often
substantial numbers of entities who have or might have some interest in the property
What notice is required to affect their rights? The U.S. Supreme Court held in Mullane
v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S. Ct. 652,
657, 94 L. Ed. 865, 873 (1950) [an enhanced version of this opinion is available to lexis.com subscribers],
that due process requires "notice reasonably calculated, under all the
circumstances, to appraise interested parties of the pendency of the action and
afford them an opportunity to present their objections."
This commentary focuses on the delivery component of required notice, with
emphasis on when notice by publication is sufficient to bind the parties so
notified. In general, the cases observe that actual notice by delivery is
required for known parties, with publication notice possible for unknown
parties. However, as discussed below, some of the cases refine that dichotomy
by expanding the scope of "known" parties, looking at a variety of
factors that affect the feasibility of giving full, actual notice.
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