In two recent decisions, the Third Circuit held that consumer class actions cannot be certified without records or some other feasible method for identifying absent class members. The cases breathe new life into the ascertainability requirement following the Supreme Court’s decision in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), and show that a plaintiff’s burden to put forth a “reliable and administratively feasible method” for ascertaining class members will not be relaxed based on the availability or adequacy of a defendant’s records.
In Hayes v. Wal-Mart Stores, Inc., No. 12-2522, 2013 WL 3957757, at *1 (3d Cir. Aug. 2, 2013), the plaintiff alleged that he purchased “as-is” products from Sam’s Club stores on two occasions and each time, he claimed, an employee sold him a store service plan without disclosing that the plan may not cover “as-is” products. The trial court certified a class consisting of all persons who purchased service plans for “as-is” clearance products from Wal-Mart’s Sam’s Club stores in New Jersey. Id. at *2. On appeal, the Third Circuit vacated the certification order, finding, among other things, that the plaintiff failed to meet his burden to show that the class was ascertainable. Id. at *2-3. Relying on its recent decision in Marcus v. BMW of North America, LLC, 687 F.3d 583 (3d Cir. 2012), the court confirmed that ascertainability under Rule 23 requires a two-part showing: first, the plaintiff must define the class with reference to objective criteria; second, “there must be a reliable and administratively feasible mechanism for determining whether putative class members fall within the class definition.” Id. at *3. If class members cannot be identified without plunging the court into extensive, individualized inquiries or mini-trials, class treatment is not appropriate. Id. Further, the court cautioned against the use of any method — such as the use of class member affidavits — that amounts to “no more than ascertaining by potential class members’ say so.” Id. at *4 (quoting Marcus, 687 F.3d at 594). Perhaps anticipating fairness arguments likely to be made by plaintiffs and their counsel, the court dismissed the district court’s concern that plaintiffs would be “hindered from bringing a class action because [a] defendant lacked certain records,” reasoning that “the nature or thoroughness of a defendant’s recordkeeping does not alter the plaintiff’s burden to fulfill Rule 23’s requirements.” Id. The plaintiff did not point to any rule obligating Wal-Mart to retain a particular set of records. Id. Thus, “Rule 23’s requirements that the class be administratively feasible to ascertain and sufficiently numerous to warrant class action treatment cannot be relaxed or adjusted on the basis of Hayes’ assertion that Wal-Mart’s records are of no help to him.” Id.
Similarly, in Carrera v. Bayer Corp., No. 12-2621, 2013 WL 4437225, at *1 (3d Cir. Aug. 21, 2013), the Third Circuit vacated a trial court’s order certifying a class of alleged purchasers of a dietary supplement because the plaintiff did not show that the proposed class was ascertainable. The plaintiff in Carrera alleged that Bayer falsely advertised that the supplement enhanced the user’s metabolism. Id. In opposing class certification, Bayer argued that the class was not ascertainable because Bayer did not sell the product directly and, therefore, had no list of purchasers. Id. The trial court rejected Bayer’s arguments and found that the plaintiff’s two suggested methods for identifying class members — by retailer records of online sales and sales made with store loyalty or rewards cards and by class member affidavits — were acceptable. Id. In reversing the trial court’s ruling, the Third Circuit noted that the core ascertainability question “is whether each class member purchased [the supplement] in Florida” — a showing plaintiff would indisputably have to make on an individual basis if pursuing claims solely on his own behalf. Id. at *4. The court found that the plaintiff’s methods for identifying class members were not reliable and, in the case of class member affidavits, deprived Bayer of its due process right to challenge proof of class membership. Id. As the court aptly put it, “a class action cannot be certified in a way that eviscerates this right or masks individual issues.” Id.
The Hayes and Carrera decisions confirm that plaintiffs cannot rely on theoretical ascertainability to satisfy Rule 23. They must show that there is a practical, “real-world” solution for identifying unnamed members of their proposed class beyond their own “say so.” As the Third Circuit explained, this standard is consistent with due process, protects absent class members by allowing for the best notice practicable, protects defendants by clearly identifying those bound by the judgment, and reduces the costly administrative challenges of identifying class members. Hayes, 2013 WL 3957757, at *3. These decisions also show that companies are not to be faulted if their otherwise valid retention and recordkeeping policies frustrate a plaintiff’s attempt to identify class members. Absent some independent obligation to preserve information, companies are not required to maintain records in order to ensure that the members of some future, as-yet-unknown putative class will be easy to identify. A plaintiff’s burden under Rule 23 does not soften if he or she finds the defendant’s records lacking.