We have posted before about the important doctrine of ascertainability, implicit in Rule 23's requirements.  And last year we posted about a federal court in New Jersey rejecting a class certification effort by plaintiffs complaining about the marketing of Skinnygirl Margaritas.

Following the Third Circuit decision clarifying one aspect of the ascertainability doctrine, in Byrd v. Aaron's Inc., 784 F.3d 154 (3d Cir. 2015), as amended (Apr. 28, 2015), plaintiffs tried a second time to show that class membership could be adequately determined.  See Bello v. Beam Global Spirits & Wine, Inc., No. CIV. 11-5149 NLH/KMW, 2015 WL 3613723 (D.N.J. June 9, 2015). The District Court again rejected the claim.

Many courts and commentators have recognized that an essential prerequisite of a class action, at least with respect to actions under Rule 23(b)(3), is that the class must be currently and readily ascertainable based on objective criteria.  If class members are impossible to identify without extensive and individualized fact-finding or mini-trials, then a class action is inappropriate.  The Third Circuit has explained that the ascertainability requirement serves several important objectives. First, at the commencement of a class action, ascertainability and a clear class definition allow potential class members to identify themselves for purposes of opting out of a class. Second, it ensures that a defendant's rights are protected by the class action mechanism. Third, it ensures that the parties can identify class members in a manner consistent with the efficiencies of a class action. If a class cannot be ascertained in an economical and administratively feasible manner, significant benefits of a class action are lost.

The method of determining whether someone is in the class must be administratively feasible. Administrative feasibility means that identifying class members is a manageable process that does not require much, if any, individual factual inquiry. To satisfy ascertainability as it relates to proof of class membership, the plaintiff must demonstrate his purported method for ascertaining class members is reliable and administratively feasible, and permits a defendant to challenge the evidence used to prove class membership. The Third Circuit has also held that a plaintiff does not meet his burden of showing by a preponderance of the evidence that there is a reliable and administratively feasible method for ascertaining the class when the only proof of class membership is the say-so of putative class members or if ascertaining the class requires extensive and individualized fact-finding.

Plaintiffs cited the clarification in Byrd as an avenue to submit the Declaration of an expert which purported to detail a claim submission process to identify class members in this matter. According to the Declaration, the screening method would involve three levels of claims validation to reduce the likelihood that individuals who submit fraudulent claims would be included in the class. One level included a supposed review by “sophisticated and state-of-the-art data matching technologies that identify patterns of duplication.” Plaintiffs also contended that the damages in this case would not be determined from claimants' proofs of purchase, but rather from Defendants' total sales.  Defendants responded that nothing had changed since the Court's prior denial of class certification, and that the expert's method had only been used in the context of settled class actions, and not in ascertaining class membership in litigated disputes. The Defendants expressed concern that potential class members would not accurately recall the details of their alleged purchases, such as the date of purchase, and the proposed process would do little to weed out fraudulent or inaccurate claims; in the end the individualized fact-finding as to each affidavit submitted that would be necessary to assess claim validity. 

The Court was not convinced that the putative classes in this case were ascertainable. The Third Circuit's concern that membership in the class cannot be ascertained other than the “say so” of proposed class members remained applicable here. Plaintiffs had not proposed an objective way of identifying class members, suggesting only the submission of claim forms by putative class members without any verifiable records or documents to corroborate the claims. The named plaintiffs in this case had already demonstrated difficulty remembering the details of their purchases,which implicated the defendant's ability to challenge class membership. A process requiring reliance on affidavits of putative class members as the primary method of ascertaining the members of the class “leaves Defendants without a suitable and fair method for challenging these individuals' purported membership in the class.”

Plaintiffs still had not offered a suitable method by which the Court could identify class members with any reliability. Defendants represented that they had no records to specifically identify the class members because they did not sell Skinnygirl Margarita directly to consumers. The Court found that the process proposed by the new expert did not demonstrate a reliable and administratively feasible mechanism for ascertaining class members.  It was unlikely that many, if any, class members had retained a receipt for their purchases of Skinnygirl Margarita approximately four to six years ago. (None of the three named plaintiffs has retained a receipt for their purchases.)  The proposed methodology also would not detect those instances in which multiple claimants file claims based on one receipt, or where a claimant has fabricated a receipt to support a fraudulent claim, or where a claimant happens to have a receipt but never actually purchased a bottle of Skinnygirl Margarita. Plaintiffs had not presented a mechanism to screen out these fraudulent types of claims, and as such had not demonstrated that their proposed methodology was reliable. Plaintiffs' inability to remember the specifics of their purchases was not “beside the point,” for it highlighted a major flaw in Plaintiffs' proposed claim process. The specific details surrounding a claimant's purchase of Skinnygirl Margarita were necessary to validate a claim. The "Court is 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." Under the proposed method, it was unclear (1) whether a purchaser must recall the exact date of purchase versus a more general time frame; (2) an acceptable range of prices; and (3) whether all of the criteria must be accurately identified or, if not, the acceptable number of criteria that must be correctly identified for a claim to advance to the next level of review.

Plaintiffs further proposed cross-referencing claims with social media activity and e-mail communications as another means of providing reliability, but the Court rejected this argument. One inherent problem with Plaintiffs' suggested use of cross-checking social media and e-mail records is that such Facebook and e-mail records, at most, only identify some unknown, unspecified portion of the putative class and may very well include individuals who never bought the product and in fact are not members of the class.  Therefore, Plaintiffs' proposed reliance on affidavits alone, without any objective records to identify class members or a method to weed out unreliable affidavits, failed to satisfy the ascertainability requirement under the law of this Circuit.

Plaintiffs were unable to identify even one consumer class action in which the procedure identified in the expert declaration was used in a litigated class action, rather than one that was settled. Overall, the Court thus found that Plaintiffs had not met their burden of demonstrating the reliability of their model. Finally, the Court rejected Plaintiffs' argument that Defendants' due process rights were protected because the entire damages were purportedly objectively quantifiable and were not based on a claimant's proof of purchase. The ascertainability requirement not only seeks to protect a defendant's rights but is also aimed at protecting the rights of absent class members. As discussed above, there is a possibility that the proposed method for ascertaining the class would result in the submission of fraudulent claims. The recovery of true class members could therefore be diluted by these fraudulent claims. Thus, Plaintiffs' focus only on Defendants in addressing ascertainability of the class was misplaced.