In re Paulsboro Derailment Cases: Putting the Brakes on Defendants’ Momentum Regarding Recent Ascertainability Developments Within the Third Circuit

by Blank Rome LLP

Class Action Defense

Action Items: Recent developments regarding the ascertainability requirement in class action lawsuits within the Third Circuit have given class action defendants another strong and viable argument to raise at the class certification stage, and In re Paulsboro Derailment Cases presents the latest decision analyzing the ascertainability requirement.

In a recent unpublished decision, Judge Robert B. Kugler of the United States District Court for the District of New Jersey addressed the rapidly developing “ascertainability” requirement in class action litigation within the Third Circuit. See In re Paulsboro Derailment Cases (“Paulsboro”), Civ. No. 13-784, 2014 WL 4162790 (D.N.J. Aug. 20, 2014) (construing Marcus v. BMW of N. Am., LLC, 687 F.3d 583 (3d Cir. 2012); Carrera v. Bayer Corp., 727 F.3d 300 (3d Cir. 2013); and Hayes v. Wal–Mart Stores, Inc., 725 F.3d 349 (3d Cir. 2013)).

In applying the guidelines set forth in the recent trilogy of Third Circuit cases construing ascertainability of proposed classes, Judge Kugler’s Paulsboro opinion presents class action practitioners with a mixed bag application of Rule 23(b). Id. at *4-*7.

In Paulsboro, plaintiffs sought to certify sub-classes of individuals and businesses based upon a trail derailment in Paulsboro, New Jersey. The train contained a dangerous chemical substance that was released into an adjacent creek and into the air. As a result, nearby residents and businesses were required to either evacuate or “shelter in place” for several days.

In deciding plaintiffs’ motion for class certification, the court was confronted with proposed sub-classes of: (i) individuals who evacuated and incurred non-medical expenses; (ii) individuals who evacuated and lost income; and (iii) businesses that lost income. After summarizing the Third Circuit’s recent ascertainability analysis set forth in Marcus, Carrera, and Hayes, the district court held that the both individual sub-classes met the ascertainability standard but that the business sub-class did not. Paulsboro, 2014 WL 4162790 at *6 -*7.

As to the individual sub-classes, the court held that “the controlling requirement is not that no fact-finding be necessary, but that extensive individualized fact-finding cannot be required if a class is readily ascertainable.” Id. at *6 (citing Marcus, 687 F.3d at 593) (emphasis in original). In finding the individual sub-classes were ascertainable, the court noted that:

  • the areas in which the class members were required to have resided had “well-defined geographical boundaries” that residence could “be ascertained through public records such as tax and census records”;
  • whether putative class members incurred expenses or lost income due the evacuation/shelter order was “an objective inquiry” that could be answered by asking a single question; and
  • the proposed sub-classes “contemplate that class members will have some documentation of their expenses or income loss.” Id.

In finding that the proposed sub-class of businesses was not ascertainable, the court held that “significant individualized fact-finding would be required to show that a potential class member” was: (i) physically located within a defined zone; (ii) incorporated in New Jersey; (iii) suffered economic loss; and (iv) those losses were a result of the derailment. Id. at *6-*7. The Court also rejected Plaintiffs’ attempt to satisfy the ascertainability requirement for the business sub-class through a supplemental affidavit from an expert witness. Id. at *7.1

Paulsboro is the most recent example of a district court addressing the ascertainability requirement based upon the Third Circuit’s holdings in Marcus, Carrera, and Hayes. This case is instructive as it provides a cohesive framework, sound reasoning and provides circumstances within which a class is—and is not—ascertainable.

A copy of the opinion is available here.

  1. Notwithstanding its finding that Plaintiffs had satisfied the ascertainability requirement with respect to the individual sub-classes, the Court denied the motion for class certification based on the failure to meet the numerosity and predominance prongs of Rule 23(a).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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