As expected, the Ninth Circuit has joined the Sixth, Seventh, and Eighth Circuits in rejecting the Third Circuit’s “administratively feasible” prong of the ascertainability requirement for class certification. Briseno v. ConAgra Foods, Inc., — F.3d —, 2017 WL 24618 (9th Cir. Jan. 3, 2017). But the opinion is a narrow one, deciding only whether the plaintiffs suing ConAgra for calling its Wesson-brand cooking oil “100% Natural,” when it allegedly contained genetically modified organisms, had to propose an administratively feasible way to identify the class members. Now plaintiffs in the Ninth Circuit, where many food-labeling cases are brought, need not prove that identifying class members will be administratively feasible to get a class certified as they must in the Third Circuit.
The Ninth Circuit’s opinion allows defendants to continue to oppose class certification on grounds that the difficulty of identifying class members makes a class action unmanageable and hence not superior to other ways of resolving a dispute—Rule 23(b)(3)’s superiority requirement. It also leaves open many other defenses to food-labeling class actions, including how to determine if the label was material to consumers’ purchase decisions; whether proof that consumers relied on the label is necessary, and if so, how to prove it; and how to prove class-wide damages.
All Circuits agree that a class must be defined with objective criteria. Most courts call this an “ascertainability” requirement. Here, because all Wesson Oil bottles included the “100% Natural” label, the class definition was simple and objective: everyone who bought Wesson Oil during the relevant time in one of 11 states. But in Marcus v. BMW of N. Am., LLC, 687 F.3d 583 (3d Cir. 2012), Hayes v. Wal-Mart Stores, Inc., 725 F.3d 349 (3d Cir. 2012), and Carrera v. Bayer Corp., 727 F.3d 300 (3d Cir. 2013), the Third Circuit added a second prong to the ascertainability requirement—that there must be “a reliable and administratively feasible” method for ascertaining proposed class members, Carrera, 727 F.3d at 308, so they can be notified of their right to opt out, fraudulent claims can be policed, and defendants may exercise their due process right to challenge the proof used to demonstrate class membership. The Eleventh Circuit embraced the “administratively feasible” prong in unpublished opinions, see, e.g., Karhu v. Vital Pharm., Inc., 621 F. App’x 945 (11th Cir. 2015), but the Sixth, Seventh, and Eighth Circuits rejected it. Sandusky Wellness Ctr., LLC, v. Medtox Sci., Inc., 821 F.3d 992, 995-96 (8th Cir. 2016); Rikos v. Procter & Gamble Co., 799 F.3d 497, 525 (6th Cir. 2015); Mullins v. Direct Digital, LLC, 795 F.3d 654, 658 (7th Cir. 2015). The Seventh Circuit’s opinion in Mullins proved to be the most persuasive, and the Ninth Circuit followed it closely.
In Briseno, the Ninth Circuit focused on Rule 23’s text, which does not mention ascertainability, either in Rule 23(a)’s prerequisites to class certification (numerosity, commonality, typicality, and adequacy of representation) or in Rule 23(b)(3)’s list of considerations the court’s findings on predominance and superiority may include. The court regarded the “administratively feasible” test as, in essence, a prerequisite to class certification that Congress would have included in Rule 23(a)’s list had Congress intended courts to require it. 2017 WL 24618, at *4. Rather, administrative feasibility should be considered under the manageability requirement, which, the court noted, should seldom defeat class certification. Id. at *6.
The Ninth Circuit then took up each of the policy considerations that led the Third Circuit to adopt the “administratively feasible” requirement and found none justified imposing a requirement not in Rule 23’s text:
- Mitigate Administrative Burdens In Giving Notice, Opting Out, and Determining Which Class Members Are Bound By Judgment. These are manageability issues that according to the Ninth Circuit are properly addressed under the superiority requirement.
- Provide Notice and the Right to Opt Out. Only the best notice practicable under the circumstances is required and that will often be by publication. Individual notice is needed only to class members who can be identified through reasonable effort, which may be few in low-value consumer cases where retail stores do not keep track of everyone who buys particular products, and consumers seldom keep receipts. The rationale for the right to receive notice is to enable a class member to opt out and sue individually, a right the Ninth Circuit considered “purely theoretical” here where no consumer would likely do so.
- Discourage Fraudulent Claims. Fraudulent claims can increase defendants’ liability and dilute class members’ recovery, but the Ninth Circuit thought large numbers of fraudulent claims unlikely. Claims rates are generally low, often only 10 or 15%, and claims administrators can, through sampling or auditing, weed out fraudulent claims that the penalty for perjury did not discourage in the first place, the Ninth Circuit explained.
- Enable Defendants to Challenge Claims. Defendants have a due process right to challenge the proof class members submit with claims, but the Ninth Circuit held that enabling them to do so in a post-judgment individual-claims process suffices. “[T]here is no due process right to ‘a cost-effective procedure for challenging every individual claim to class membership.’” Id. at * 9 (quoting Mullins, 795 F.3d at 669).
Briseno sets back defendants’ efforts to convince courts to deny class certification when identifying most class members will be impossible, so that any judgment paid is unlikely to reach the vast majority of consumers entitled to it. But where the inability to identify class members makes a case unmanageable, defendants can continue to press a manageability defense, even though many courts hesitate to deny class certification solely on manageability grounds. And this opinion’s narrow scope leaves open all other defenses to class certification.