A New Jersey federal court ruled that plaintiffs once again failed to demonstrate the ascertainability of a class of purchasers seeking to challenge “all natural” claims by the makers of Skinnygirl Margarita. Stewart v. Beam Global Spirits & Wine, Inc., No. 11-5149 (D.N.J. June 8, 2015). The court held that the Third Circuit’s high bar for demonstrating ascertainability was not lowered by its most recent decision on the issue, Byrd v. Aaron’s Inc., 784 F.3d 154 (3d Cir. 2015). The Stewartdecision is notable for its analysis and rejection of plaintiffs’ effort to rely on a class action administrator’s declaration to establish a “reliable and administratively feasible” methodology for ascertaining class membership.

Ascertainability Requirements

The court noted that there are two requirements for ascertainability: (1) the class must be defined with reference to objective criteria, and (2) there must be a reliable and feasible mechanism for determining whether putative class members fall within the class definition. The court concluded that, because putative class members were simply defined as purchasers of Skinnygirl Margaritas between specified dates, the first requirement was satisfied; the second, however, was not.

The court reiterated the Third Circuit’s guiding principle, first articulated in Carrera v. Bayer Corp., 727 F.3d 300, 306 (3d Cir. 2013), that ascertainability may not be based on the purported class members’ “say so;” a methodology that depends primarily on class members’ affidavits does not give defendants a “suitable and fair” basis for challenging class membership. In Stewart, the defendants did not sell directly to consumers and did not have records that would permit identification of class members. Plaintiffs attempted to satisfy the requirement of a reliable and feasible methodology for identifying class members by submitting the declaration of Steven Weisbrot, the executive vice president of Angeion Group, LLC, a class action administration firm, detailing the methodology proposed to be applied. The court addressed the proposed methodology in detail, finding it lacking in numerous respects.

Analysis of Proposed Methodology

The Weisbrot declaration proposed a three-tiered methodology. In the first level of review, claims submitted with a receipt would be accepted and subject to further review only at the third level. Class members who had not retained receipts would be subject to a second level of review, involving multiple factors such as identifying the size of the bottle from photographs and providing details about date of purchase, place of purchase, and price, which the class action administrator would use to validate claims. Finally, a third level of review would apply “sophisticated . . . data matching techniques” to identify patterns of duplication.

The court found the declaration insufficient at every level. The court noted that few purchasers would have retained receipts, and that, in any event, possession of a receipt did not necessarily demonstrate that the claimant had purchased the product. Claimants could fabricate receipts, use a receipt to support more than one claim, or could have come into possession of the receipt by happenstance. The third tier of review would only identify duplicative claims, not detect other types of fraud.

The court expressed even more skepticism as to the second level of review, noting that even the named plaintiffs could not recall the details of their purchases. The court stated that it was “left to wonder how the named plaintiffs, or any claimant, can complete an affidavit attesting under oath to the details of their purchases when they cannot remember such specifics.” The court concluded that claimants would either provide only generalized information that would not provide any indicia of reliability, would speculate, or could possibly make up the information. The court thus concluded that the fraud prevention methodology in the declaration was not a workable, reliable process for identifying class members. The court also noted that even were the proposed methodology workable, plaintiffs had not demonstrated that it was reliable because Mr. Weisbrot admitted that it had only been applied to settlement classes and never to a litigation class, and because he admitted in his deposition that it might not be reliable.

The court lastly rejected plaintiffs’ argument that defendants’ due process rights were protected because total damages from the sales of the beverage were purportedly objectively quantifiable and not based on consumers’ proof of purchase. Following Carrera, the court said that even if defendants’ rights were protected, the risk of fraudulent claims meant that the recovery of legitimate claimants could be improperly diluted. The court then denied class certification based on plaintiffs’ inability to carry their burden of proof that the class was ascertainable.

Ascertainability in the Ninth Circuit

The Ninth Circuit has not yet ruled on the standard for ascertainability; a case currently pending before the court, Jones v. Conagra Foods, Inc., No. C12-01633 CRB (N.D. Cal. June 13, 2014), will provide the first opportunity for it to do so. District court opinions in food labeling cases within the Ninth Circuit have taken a variety of approaches to the ascertainability issue. Some cases have adopted the Third Circuit approach. See, e.g., In re Clorox Consumer Litigation, 301 F.R.D. 436 (N.D. Cal. 2014); Sethavanish v. ZonePerfect Nutrition Co., No. 12-2907-SC (N.D. Cal. Feb. 13, 2014). Others have rejected it, taking a significantly more permissive approach to ascertainability and finding it sufficient for plaintiffs to rely on class member declarations and an adequate notice plan.Seee.g.Allen v. Similasan Corp., No. 12-cv-376 BAS (JLB) (S.D. Cal. Mar. 27, 2015); Lilly v. Jamba Juice Co., No. 13-cv-02998-JST (N.D. Cal. Sept. 18, 2014). Still other courts in the Ninth Circuit have rejected the Third Circuit’s approach as too strict but have nonetheless found classes unascertainable because variations in product labeling, advertising, product contents, or other factors precluded ascertainability. See, e.g., Jones v. Conagra Foods, supraIn re POM Wonderful, LLC, No. 10-2199 DDP (RZx) (C.D. Cal. Mar. 25, 2014).

If the Ninth Circuit rejects the Third Circuit’s approach and adopts a different standard, ascertainability may well be the next major class action issue headed for the United States Supreme Court.