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Just Who is a Member of the Class? “Ascertainability” in US Products-Liability Class-Action Litigation

Mary T Yelenick, Norton Rose Fulbright, US

An important issue with which the US courts are currently grappling in products-liability class-action litigation involves situations in which the named plaintiff (and, presumably, other members of the class that he or she seeks to represent) lacks physical proof, such as a sales receipt, establishing that she actually purchased the product at issue. This factual scenario may arise most frequently in cases involving relatively low-cost items sold nationally by a variety of different retailers.

In order to determine the scope and manageability of the proposed class action, a court must, among other things, be satisfied that it is administratively feasible to identify objectively who is a member of that class. In other words, the identity of class members must be "ascertainable." The failure to have a class definition premised upon an objectively-verifiable test for class membership could lead individuals to "game" the class-action process -- asserting class membership if they viewed a class determination to be beneficial to them, but disclaiming such membership, and thus any personal binding impact, in the event of an adverse decision.

The ascertainability requirement is, as the Third Circuit Court of Appeals has emphasized, "an essential prerequisite of a class action." Carrera v. Bayer Corp., 727 F.3d 300, 306 (3d Cir. 2013). Carrera was a putative class action brought on behalf of a class of consumers who claimed to have purchased defendant's allegedly deceptively-advertised multivitamin and diet supplement. While the named plaintiff lacked any record of her claimed purchase of the product, he argued that the court could nonetheless determine membership of the class of product purchasers by relying on company sales records involving buyers who had used loyalty or rewards cards; records of on-line sales; or affidavits by individuals attesting that they had in fact purchased the product. Carrera, 727 F.3d at 304.

The Court of Appeals in Carrera found plaintiff's proposals insufficient, and vacated certification. The court found no evidence that all individual product purchasers could be identified through sales records, inasmuch as the defendant did not sell its products directly to consumers and had no record of individual sales, and retailers who sold the product did not keep records identifying individual purchasers. The court similarly rejected reliance on affidavits by claimed purchasers, recognizing that such self-serving affidavits could easily spur false claims or rest on false memories. The court emphasized that ascertainability served important functions, including making it possible for potential class members to opt out (i.e., choose to exclude themselves from) a class, as well as protecting a defendant's right to examine and challenge individual claimants' assertions of class membership. See id. at 306-07.

Similarly, in Hayes v. Wal-Mart Stores, Inc., 725 F.3d 349 (3d Cir. 2013) (though not a products-liability case), the Third Circuit Court of Appeals reversed class certification where the plaintiff failed to demonstrate a "reliable and administratively feasible method for ascertaining the class." Id. at 356. The Third Circuit rejected the argument that a plaintiff should "not be hindered from bringing a class action because defendant lacked certain records," id. at 355, observing that "the nature or thoroughness of a defendant's recordkeeping does not alter the plaintiff's burden to fulfill Rule 23's requirements." Id. at 356. And in Marcus v. BMW of N. Am., LLC, 687 F.3d 583 (3d Cir. 2012), the Third Circuit explained that ascertainability is important because it "eliminates 'serious administrative burdens that are incongruous with the efficiencies expected in a class action' by insisting on the easy identification of class members" (citation omitted); "protects absent class members by facilitating the 'best notice practicable'" under Federal Rule of Civil Procedure 23, which governs class actions in federal court; and "protects defendants by ensuring that the individuals who will be bound by the final judgment are clearly identifiable." Id. at 593. The court also stated that "forcing [defendants] to accept as true absent persons' declarations that they are members of the class, without further indicia of reliability, would have serious due process implications." Id. at 594.

The Eleventh Circuit Court of Appeals similarly ruled, in Karhu v. Vital Pharm., Inc., 2015 WL 3560722 (11th Cir. June 9, 2015), that the plaintiff could not establish ascertainability "simply by asserting that class members can be identified using the defendant's records," id. at *3; rather, the plaintiff "must also establish that the records are in fact useful for identification purposes," and that identification would be "administratively feasible." Id.

The Fourth Circuit Court of Appeals in EQT Prod. Co. v. Adair, 764 F.3d 347 (4th Cir. 2014) also found (while not in a products-liability context) the lack of ascertainability of class members to be an obstacle to class certification. See id. at 359 (class certification deemed premature, given plaintiff's failure to satisfy ascertainability requirements, where existing records regarding gas-right ownership were outdated, posing a "significant administrative barrier to ascertaining the ownership classes").

Other Courts of Appeal, however, have taken a different approach. In Mullins v. Direct Digital, LLC, 795 F.3d 654 (7th Cir. 2015), the Seventh Circuit upheld an order of class certification despite the fact that neither the plaintiff nor defendant maintained records that could be used to identify the members of the putative class. The court expressed its concern that what it characterized as a "heightened ascertainability requirement" would have the "effect of barring class actions where class treatment is often most needed: in cases involving relatively low-cost goods or services, where consumers are unlikely to have documentary proof of purchase." Id. at 658.

And in Rikos v. Proctor & Gamble Co., 799 F.3d 497 (6th Cir. 2015), the Sixth Circuit, citing Mullins, affirmed certification of a class of purchasers of probiotics, agreeing with the lower court that class membership could be determined upon a review of defendants' own internal data, "supplemented through the use of receipts, affidavits, and a special master to review individual claims." Id. at 526.

This split among the federal Circuits suggests that the meaning and consequences of "ascertainability" may be ripe for review by the Supreme Court of the United States. The defendant in Mullins petitioned for such review, but that petition was recently denied by the Supreme Court - leaving the Mullins decision intact. A decision by the high court could have a significant impact on the nature, scope, and method of proof in future US products-liability class actions.