## Facts

- Distributors, including Baldwin & Flynn, sued National Safety Associates, Inc. (NSA), a multilevel direct-sales company marketing household air and water filtration systems.
- Plaintiffs alleged NSA operated an illegal pyramid scheme and induced purchases of distributorships through misrepresentations and omissions about profitability, legality, and expected returns.
- The suit asserted federal securities claims, RICO, and related fraud and unfair competition theories tied to the distributorship structure and recruitment-based compensation.
- Plaintiffs sought certification of a nationwide class of distributorship purchasers and supported certification with standardized promotional materials and declarations suggesting common practices.
- NSA opposed certification, arguing that recruiting pitches and alleged misrepresentations varied significantly and were often oral and made by individual sponsors whose agency relationship to NSA was disputed.
- While class certification was pending, NSA moved for discovery directed at absent putative class members, seeking leave to depose nearly half of the proposed class to examine what each member was told and by whom.

## Issues

1. Whether a defendant opposing class certification may conduct extensive pre-certification depositions of absent putative class members to test Rule 23(a) requirements, based on claimed variation in oral representations.
2. What limits apply to discovery directed at absent class members at the class-certification stage, considering necessity, burden, and potential for harassment.

## Decision

- The court denied NSA’s motion to take sweeping depositions of absent putative class members.
- The court found the request overbroad and unduly burdensome in scope.
- The court concluded NSA failed to make a sufficient showing that mass absent-member discovery was necessary to decide Rule 23 certification issues.
- The court determined that certification-related disputes could be addressed through the existing record and more conventional discovery (e.g., discovery from parties and targeted sources) rather than near-mass depositions.

## Legal Principles

- Discovery directed at absent class members is generally disfavored and permitted only in limited circumstances subject to close judicial control.
- A party seeking absent-class-member depositions at the pre-certification stage must make a specific, strong showing that the discovery is necessary to resolve identified Rule 23 issues and cannot reasonably be obtained through less burdensome means.
- Courts may restrict absent-member discovery to prevent undue burden, delay, and potential harassment, and to preserve the efficiency and representative nature of class actions.
- Alleged variation in oral sales statements does not, by itself, justify broad discovery from absent members where the case centers on common questions concerning an alleged standardized scheme or uniform business structure.

## Conclusion

The court refused to permit near-mass pre-certification depositions of absent putative class members, holding that such discovery was disproportionate and unnecessary to evaluate class certification where common-issue evidence and ordinary party discovery provided an adequate basis to assess Rule 23 requirements.


Baldwin & Flynn v. Nat'l Safety Assocs., Inc., 149 F.R.D. 598 (N.D. Cal. 1993)