While ascertainability is often hard-fought in class certification motions, it’s unusual for a class action settlement to crater on ascertainability. But that’s exactly what happened to a Comcast settlement in federal court in Philadelphia earlier this month. When Judge Anita Brody learned that Comcast had no records of proposed class members who cancelled their cable TV subscriptions before 2011, and Plaintiffs had no reasonable plan for how to identify them, she denied certification and denied preliminary approval of a settlement class that included Comcast subscribers from 2005 to 2014. In re Comcast Corp. Set-Top Cable Television Box Antitrust Litig., MDL No. 09-md-2034, slip op. (E.D. Pa. Nov. 5, 2015).
The proposed settlement was intended to resolve what had been two dozen lawsuits the MDL panel transferred to the Eastern District of Pennsylvania in 2009. The suits attacked Comcast under Section 1 of the Sherman Act and the antitrust and consumer protection laws of California, Washington, and West Virginia for allegedly tying set-top box rentals to premium cable services that offer extra-cost channels such as HBO and Showtime, and access to pay-per-view services. To view the premium programs, customers had to rent a set-top box from Comcast at allegedly inflated prices.
Current Comcast customers posed no problem because Comcast knows who they are and could deliver the agreed benefits in a claims-made settlement: $10 to $15 in cash or in-kind programming benefits depending upon how long they subscribed. But Comcast’s lack of information about customers who cancelled their subscriptions before 2011 left many proposed class members unidentifiable.
In Marcus v. BMW of N. Am., LLC, 687 F.3d 583, 594 (3d Cir. 2012), the Third Circuit warned against using unverifiable affidavits to establish ascertainability, “a method that would amount to no more than ascertaining by potential class members’ say so,” and reiterated its warning in Carrera v. Bayer Corp., 727 F.3d 300, 304 (3d Cir. 2013). With these decisions in mind, Judge Brody dismissed the parties’ “paltry arguments” that customers could buttress affidavits by submitting account numbers, cancelled checks, old bills, credit card receipts, communications with Comcast, insurance claims, or police reports. Slip op. at 9-10. None of this would prove that a customer subscribed to premium cable service and rented a set-top box from Comcast—two prerequisites for class membership. “Not only do Plaintiffs’ justifications lack analytical substance, but they also lack evidentiary support.” Id. at 10.
In Marcus, Hayes v. Wal-Mart Stores, Inc., 725 F.3d 349, 355 (3d Cir. 2013), and Carrera, the Third Circuit established a two-part test for ascertainability: (1) the class must be defined with reference to objective criteria, and (2) there must be a reliable and administratively feasible mechanism for determining whether putative class members fall within the class definition. “Administrative feasibility means that identifying class members is a manageable process that does not require much, if any, individual factual inquiry.” Carrera, 727 F.3d at 307-08. Here, the parties failed the second part.
The second part of the test—administrative feasibility—makes a great deal of sense but is proving controversial. The Eleventh Circuit has embraced it in non-precedential opinions. Karhu v. Vital Pharm., Inc., — F. App’x —, 2015 WL 3560722 (11th Cir. June 9, 2015); Bussey v. Macon Cnty. Greyhound Park, Inc., 562 F. App’x 782, 787 (11th Cir. 2014). As noted here, the Seventh Circuit has rejected it. Mullins v. Direct Digital, LLC, 795 F.3d 654, 662, 672 (7th Cir. 2015). Judge Marjorie Rendell wrote a concurring opinion in Byrd v. Aaron’s, Inc., 784 F.3d 154, 174-75 (3d Cir. 2015), arguing that the Third Circuit should dispense with it. Her opinion influenced the Seventh Circuit. See Mullins, 795 F.3d at 661.
But in the Third Circuit, both parts stand and Judge Brody decided she was compelled both to deny certification of the proposed settlement class for want of ascertainability and to deny settlement approval due to the absence of a certifiable class. Slip op. at 12. As the Third Circuit said, “the nature of the defendant’s recordkeeping does not alter the plaintiff’s burden to fulfill Rule 23’s requirements.” Hayes, 725 F.3d at 356. Judge Brody’s opinion makes it clear that the ascertainability requirement applies to settlements just as much as to litigated classes. Lack of records is no excuse.
On November 24, Judge Brody stayed her order while the plaintiffs seek leave to appeal to the Third Circuit.