Presenting a live 90-minute webinar with interactive Q&A Ascertainability Requirement in Class Litigation: Lessons From Byrd v. Aarons and Carrera v. Bayer Corp. Strategies for Challenging Class Membership and Defeating Certification THURSDAY, SEPTEMBER 17, 2015 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: David Kouba, Counsel, Arnold & Porter , Washington, D.C. Nina R. Rose, Counsel, Skadden Arps , Washington, D.C. The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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Ascertainability Requirement In Class Litigation September 17, 2015 David Kouba and Nina Rose
Overview ▪ What is ascertainability? ▪ Using the ascertainability requirement against class action plaintiffs – Overbroad classes – “Fail - safe” classes – Hard-to-identify classes ▪ Ascertainability – recent trends – Carrera – Ascertainability after Carrera ▪ EQT Production Co. v. Adair , 764 F.3d 347 (4th Cir. 2014) ▪ Byrd v. Aaron’s Inc., 784 F.3d 154 (3d Cir. 2015) ▪ Karhu v. Vital Pharmaceuticals, Inc. , No. 14-11648, 2015 WL 3560722 (11th Cir. June 9, 2015) ▪ Mullins v. Direct Digital, LLC , No. 15-1776, 2015 WL 4546159 (7th Cir. July 28, 2015). ▪ Rikos v. The Proctor & Gamble Co., No. 14-4088, 2015 U.S. App. LEXIS 14613 (6th Cir. Aug. 20, 2015) – Supreme Court likely to weigh in soon in light of Circuit split ▪ Summary practice points 6
What Is Ascertainability? ▪ Ascertainability means that the members of a certified class must be sufficiently definite – i.e., that class members can be easily ascertained or determined using objective criteria. ▪ Ascertainability is not explicit in Rule 23. – Perrine v. Sega of America, Inc. , No. 13-cv-01962-JD, 2015 WL 2227846 (N.D. Cal. May 12, 2015) (“In addition to the explicit requirements of Rule 23, an implied prerequisite to class certification is that the class must be sufficiently definite; [and] the party seeking certification must demonstrate that an identifiable and ascertainable class exists.”) (internal quotation marks and citation omitted) – Physicians Healthsource, Inc. v. Alma Lasers, Inc. , No. 12 C 4978, 2015 WL 1538497 (N.D. Ill. Mar. 31, 2015) (“While not an explicit requirement under Rule 23, the Seventh Circuit has held that a class definition ‘must be definite enough that the class can be ascertained.’”) (internal quotation marks and citation omitted) 7
What Is Ascertainability? ▪ Ascertainability serves three essential purposes at the class certification stage: – It allows potential class members to identify themselves for purposes of opting out of a class. – It ensures that a defendant’s rights are protected by the class action mechanism. – It ensures that the parties can identify class members in a manner consistent with the efficiencies of a class action. 8
What Is Ascertainability? ▪ Class action defendants have long argued that “ascertainability” is an implicit prerequisite to class certification. ▪ Defendants argue that ascertainability requires plaintiffs to prove that membership in the putative class can be easily determined using objective criteria. ▪ A number of courts have agreed, finding that the ascertainability requirement is critical to ensure manageability and fairness in class- action proceedings. ▪ Courts across the country, however, continue to debate what is necessary to satisfy this requirement. 9
Using The Ascertainability Requirement Against Class Action Plaintiffs ▪ Caselaw addressing ascertainability generally focuses on three problematic types of classes: – (1) the overbroad class – (2) the fail-safe class – (3) the difficult-to-identify class 10
Using The Ascertainability Requirement: Overbroad Classes ▪ Over the last several years, multiple courts have found that a proposed class that includes all users of a product or service – irrespective of whether the proposed class members suffered any injury or have any complaints about the product or service – is not ascertainable. – See Moore v. Apple Inc. , No. 14-CV-02269-LHK, 2015 WL 4638293 (N.D. Cal. Aug. 4, 2015); McKinnon v. Dollar Thrifty Automotive Group, Inc. , No. CV 12-cv-04457-SC, 2015 WL 4537957 (N.D. Cal. July 27, 2015); Konik v. Time Warner Cable , 2010 U.S. Dist. LEXIS 136923, at *33 (C.D. Cal. Nov. 24, 2010); Oshana v. Coca-Cola Co. , 472 F.3d 506, 513-14 (7th Cir. 2006); Davenport v. Interactive Communs. Int’l , 2010 Cal. App. Unpub. LEXIS 6364, at *19-22 (Cal. Ct. App. Aug. 9, 2010). 11
Using The Ascertainability Requirement : Overbroad Classes ▪ As some courts have explained, this is so because such a class encompasses a substantial number of class members who lack standing to recover on the asserted claims. – See McDonald v. Corr. Corp. of Am. , 2010 U.S. Dist. LEXIS 122674, at *8 (D. Ariz. Nov. 4, 2010). 12
Using The Ascertainability Requirement : Overbroad Classes ▪ This argument has been weakened by recent appellate cases rejecting this argument. – Whirlpool Corp. v. Glazer , 678 F.3d 409 (6th Cir. 2012) (affirmed class certification of consumers alleging mold in washing machines even though 97 percent of class members never complained about any problem with their washers; “ Even if some class members have not been injured by the challenged practice, a class may nevertheless be appropriate ”) ▪ This argument could also be affected by the U.S. Supreme Court’s decision in Tyson Foods, Inc. v. Bouaphakeo – Question presented includes “(2) whether a class action may be certified or maintained under Rule 23(b)(3), or a collective action certified or maintained under the Fair Labor Standards Act, when the class contains hundreds of members who were not injured and have no legal right to any damages.” 13
Using The Ascertainability Requirement : Fail-Safe Classes ▪ The ascertainability requirement also bars classes in which the named plaintiffs propose a class definition that incorporates a legal conclusion ( e.g. , all consumers who were wrongfully denied . . .). ▪ These are known as “fail - safe” classes. – Ratnayake v. Farmers Insurance Exchange , No. 2:11-cv-01668-APG-CWH, 2015 WL 875432 (D. Nev. Feb. 27, 2015) (the proposed class definitions created “fail - safe” classes because they included only insureds who had received “insufficient discounts under Nevada law”) – Alhassid v. Bank of America, N.A. , No. 14-CIV-20484, 2015 WL 4606760 (S.D. Fla. July 31, 2015) (holding that the nine class definitions proposed by the plaintiffs were impermissibly fail safe because membership in the class would be dependent on whether the company violated HUD guidelines or the company’s internal policies) – Agostino v. Quest Diagnostics Inc. , 256 F.R.D. 437, 479 (D.N.J. 2009) (“A court must reject a proposed class or subclass definition that ‘inextricably intertwines identification of class members with liability determinations.’”) 14
Using The Ascertainability Requirement : Fail-Safe Classes ▪ Fail-safe classes are problematic because they create a situation in which class members are only bound by a judgment that finds the defendant liable. – See, e.g. , Canez v. King Van & Storage , 2010 Cal. App. Unpub. LEXIS 9687, at *7-8 n.8 (Cal. Ct. App. Dec. 7, 2010). ▪ If the class is defined as everyone who was wronged by the defendant and the defendant prevails at trial, then it turns out that nobody was in the class to begin with – and thus nobody is bound by the ruling. – See, e.g. , Genenbacher v. CenturyTel Fiber Co. II , 244 F.R.D. 485, 488 (C.D. Ill. 2007) (explaining that fail-safe classes are unfair because the result of resolution of membership question is that class members “win or are not in the class”). 15
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