DTD Enterprises, Inc. v. Wells

Background

DTD Enterprises is a commercial dating‑referral company that sued a customer for unpaid contract charges. The customer countered by filing a class action on behalf of other customers. The New Jersey trial court certified the class and ordered the company to pay all costs of notifying class members, apparently because the company could afford those costs while the customer could not.

Reasoning

The core question the Justice highlighted was whether a court may force a defendant to bear the heavy expense of class notification solely because the defendant is wealthier, without assessing the legal merits of the class claim. Justice Kennedy explained that such an order can raise serious due process problems because it can destroy the defendant’s property interest and leave little hope of recovering costs if the suit proves meritless. He emphasized that a hearing appropriate to the nature of the case is required. Despite these concerns, he declined to grant review because the petition was interlocutory, state appellate courts had not issued a reasoned decision, and the company’s bankruptcy triggered an automatic stay that would block meaningful review.

Real world impact

The statement warns that shifting class-notification expenses onto wealthier defendants could make defending class actions financially impossible for some companies. Because the Court denied review and did not rule on the merits, the constitutional question remains open and may be resolved later after state appellate rulings or when bankruptcy issues are cleared.