Unpublished class notice holding: Small Property Owners of San Francisco v. City and County of San Francisco

In an unpublished portion of Small Property Owners of San Francisco v. City and County of San Francisco, ___ Cal.App.4th ___ (Aug. 9, 2006) (First Appellate District, Division Five), the Court of Appeal held that notice of the unfavorable outcome of a class action need not be provided to the class members in the same manner as the original notice:

In this case, appellants argue, notice of the adverse judgment by mail would cost appellants over $20,000, and would not result in any commensurate benefit to class members. Because appellants lost, there is no risk of collusion or benefit to the named plaintiffs at the expense of the class members, as might occur in the event of a collusive settlement, nor does the judgment impose on class members the obligation to take any action or elect how they will proceed. Therefore, appellants urge, giving notice by their website or the San Francisco Rent Board’s website is the most reasonable means of providing notice of the judgment to the class members.

....

The record does not disclose any logical justification for requiring appellants to spend over $20,000 in mailing costs just to tell class members of an adverse judgment. The portion of the judgment requiring notice by standard mail is therefore stricken, such that the sentence “The notice . . . shall be served in the same manner as provided in the Order for the earlier Notice — both by standard mail and by posting on the website of plaintiff Small Property Owners of San Francisco: www.smallprop.org” shall now read: “The notice . . . shall be served by posting on the website of plaintiff Small Property Owners of San Francisco: www.smallprop.org.” ....

(Slip op. at 24-25.) This is an interesting holding, which should have been published along with the rest of the opinion.