August 18, 2015 Practice Points

Seventh Circuit Rejects Third Circuit's "Heightened" Ascertainability Analysis

Defendants opposing class certification in the Seventh Circuit still will have the opportunity to challenge proposed class definitions as failing to satisfy the traditional superiority and manageability requirements of Rule 23.

By E. Colin Thompson

In its July 28, 2015, decision in Mullins v. Direct Digital, LLC, Case No. 15-1776, the Seventh Circuit Court of Appeals rejected the Third Circuit’s strict application of class certification’s implicit ascertainability requirement, as detailed in Carrera v. Bayer Corp., 727 F. 3d 300 (3d Cir. 2013). The Mullins court concluded that the ascertainability requirement imposed by the Third Circuit is a “new” and “heightened” requirement with “absolute priority” that has the “effect of barring class actions where class treatment is often most needed: in cases involving relatively low-cost goods or services.”

In Mullins, the court affirmed an order certifying a class of purchasers of a supplement that plaintiffs alleged the defendant fraudulently represented as relieving joint discomfort. The Seventh Circuit agreed to hear the interlocutory appeal “to address whether Rule 23(b) imposes a heightened ‘ascertainability’ requirement as the Third Circuit and some district courts have held recently.” It went on to reject each of the “policy concerns motivating the heightened ascertainability requirement” that were laid out by the Third Circuit in Carrera.

“Ascertainability,” the Mullins court affirmed, means that classes must “be defined clearly and based on objective criteria.” Until recently, courts were not focused on whether, “it would be difficult to identify particular members of the class.” The court warned that the “well-settled” ascertainability requirement is “susceptible to misinterpretation,” which “may explain some of the doctrinal drift.”

Beginning with Marcus v. BMW of N. Am., LLC, 687 F. 3d 583 (3d Cir. 2012), the Third Circuit began to adopt a more stringent version of ascertainability. As the Mullins court explained, the Third Circuit’s test for ascertainability now has two prongs: (1) the class must be ‘defined with reference to objective criteria’ and (2) there must be ‘a reliable and administratively feasible mechanism for determining whether putative class members fall within the class definition.’” Although the second requirement “sounds sensible at first glance,” the Mullins court stated, “[i]n practice . . . some courts have used this requirement to erect a nearly insurmountable hurdle at the class certification stage in situations where class action is the only viable way to pursue valid but small individual claims.”

Carrera and other courts discussed four policy reasons for the heightened ascertainability requirement and why self-identification through affidavits from putative class members is insufficient to satisfy the requirement. As explained in Mullins, courts applying the heightened ascertainability requirement say that it (1) “eliminates serious administrative burdens that are incongruous with the efficiencies expected in a class action by insisting on the easy identification of class members;” (2) protects absent class members by affording them the best notice practicable so that they can opt-out or be bound by the judicial proceedings; (3) reduces the risk that fraudulent or mistaken claims will dilute the recovery of bona fide class members; and (4) protects defendants’ due process rights.

The Mullins court rejected each of these policy reasons as justifications for a “heightened” ascertainability requirement. Rule 23’s existing requirements, the court held, “already address the balance of interests that Rule 23 is designed to protect” and a “heightened” ascertainability requirement “skew[s] the balance” and “does not further any interest of Rule 23 that is not already adequately protected by the Rule’s explicit requirements.”

Instead, the court said, district courts should continue to insist that a class be defined clearly and with objective criteria so as to meet the “established meaning of ascertainability.” They should not, however, refuse certification just because the plaintiff proposes self-identification through affidavits. Rather, if a proposed class appears to present “unusually difficult manageability problems, district courts have discretion to press the plaintiff for details about the plaintiff’s plan to identify class members.”

Defendants opposing class certification in the Seventh Circuit still will have the opportunity to challenge proposed class definitions as failing to satisfy the traditional superiority and manageability requirements of Rule 23. The Seventh Circuit has, however, made clear that, unlike in the Third Circuit, its district courts cannot refuse to certify a class merely because the plaintiff does not present “a reliable and administratively feasible mechanism for determining whether putative class members fall within the class definition” or because the only method proposed to identify class members is through affidavits from the class members.

E. Colin Thompson is a shareholder with Smolker Bartlett Loeb Hinds & Sheppard in Tampa, Florida.


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E. Colin Thompson – August 18, 2015