Third Circuit "clarifies" ascertainability: Is the circuit split?

The Third Circuit has published extensively in recent years on the issue of ascertainability. The court teaches that ascertainability is an implied prerequisite for class certification under Rule 23, and should be separately considered by the trial court. The gist of the doctrine is that a class must be defined by reference to objective criteria, and there must be a reliable and administratively feasible mechanism for determining who falls within that definition.

On April 16, 2015, the Third Circuit issued its fifth ruling in three years on this subject: Byrd v. Aaron’s, Inc., No. 14-3050, 2015 U.S. App. LEXIS 6190 (3d Cir. April 16, 2015). Why? It said that it was “necessary to address the scope and source of the ascertainability requirement” because of “apparent confusion in the invocation and application” of the doctrine in the Third Circuit. Id. at *9.

The Byrd court reversed certification of a class of consumers who had leased or purchased laptop computers that contained unauthorized spyware. The decision tracks and clarifies much of the case law established by the Third Circuit’s prior decisions, with two important exceptions.

First, although the court acknowledged that there would be ambiguity in determining exactly who was—or wasn’t—a “household member” of a purchaser or lessee, it said that the inquiry would “not require a ‘mini-trial,’ nor does it amount to ‘individualized fact-finding’” because “anyone charged with administering the fund resulting from a successful class action [will] ensure that person is actually among the 895 customers identified by the Byrds.” Id. at *34–35.

In other words, the term “household members” was ascertainable not because it is administratively feasible for the trial court to figure it out at the class certification stage, but because a claims administrator could sort it out after class certification and judgment on the merits.

As an implied prerequisite to Rule 23 certification, however, the ascertainability analysis has to be performed before certification, not after. And it needs to be performed by the court, not the claims administrator. That’s because the court needs to be able to ascertain class membership to ensure that class members receive notice before trial to so that they can either opt out or be bound by the judgment. Any rule that permits notice after trial re-introduces the now-discredited practice of one-way intervention, which Rule 23 was amended to preclude.

Second, in Carrera v. Bayer Corp., 727 F.3d 300, 307 (3d Cir. 2013), the court previously held that a truly “manageable process [is one] that does not require much, if any individualized factual inquiry.” Although most courts say that “mini-trials” and individualized determinations cut against ascertainability, few have quantified just how much individualized evidence will render a class un-ascertainable. In the Third Circuit, the answer was clear: “Not much, if any.”

But the Byrd court apparently took a very different view. It said:

Carrera does not suggest that no level of inquiry as to the identity of class members can ever be undertaken. If that were the case, no Rule 23(b)(3) class could ever be undertaken. We are not alone in concluding that “the size of a potential class and the need to review individual files to identify its members are not reasons to deny class certification.” See Young v. Nationwide Mut. Ins. Co., 693 F.3d 532, 539–40 (6th Cir. 2012).

Byrd, 2015 U.S. App. LEXIS at *35 (emphasis in original).

True, Carrera didn’t say that “no” inquiry can ever be undertaken. But the Young case approved the review of hundreds of thousands of individual local government premium tax assignments as administratively feasible. Invoking Young stands in sharp contrast to the “not-much-if-any” standard approved in Carrera. Whether the reference to Young was inadvertent, or whether the Byrd panel really meant to depart from the “not-much-if-any” standard set by Carrera, remains to be seen. It will be interesting to see how the courts within the Third Circuit sort out this apparent contradiction.

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