In Hayes v. Wal-Mart Stores, Inc., 725 F.3d 349 (3d Cir. Aug. 2, 2013), the Third Circuit vacated the trial court’s certification order and remanded in light of its earlier decision, Marcus v. BMW of North America, LLC, 687 F.3d 583 (3d Cir. 2012), and the certification requirements that opinion established.

Plaintiff Hayes brought a putative class action against Wal-Mart asserting claims related to the company’s sale of extended warranty plans through Sam’s Club stores.  Specifically, Hayes sued based on Wal-Mart’s sale of service plans for items that, by their plain language, the plans did not cover.  The trial court certified the class, and the Third Circuit granted Wal-Mart’s interlocutory appeal.  Noting that the trial court did not have the benefit of Marcus when it decided the certification issue, the appellate court vacated and remanded.

First, the Third Circuit explained that Marcus established two important elements for ascertainability: first, the class must be defined with reference to objective criteria, and second, there must be a “reliable and administratively feasible mechanism for determining whether putative class members fall within the class definition.”  Hayes, 725 F.3d at 355.  Because the trial court did not consider whether it would be “administratively feasible to ascertain class members,” and because Hayes did not show by a preponderance of the evidence that there was such a method, the Third Circuit vacated certification and remanded.  Id. at 355–56.  Notably, the court explained that the plaintiff’s burden to fulfill Rule 23’s requirements is not altered by “the nature or thoroughness of a defendant’s recordkeeping” and that Hayes did not cite any statutory or regulatory authority obligating Wal-Mart to create and maintain certain records.  Id. at 356.

Second, the court cited Marcus for the principle that “in the absence of direct evidence [of the exact number and identities of the class members], a plaintiff must show sufficient circumstantial evidence specific to the products, problems, parties, and geographic areas actually covered by the class definition to allow a district court to make a factual finding [of numerosity].”  Id. at 357 (citing Marcus, 687 F.3d at 596–97).  The court explained that, where a putative class is a subset of a larger pool of individuals, a trial court cannot infer numerosity from the size of that larger pool, and it rejected a “wait-and-see approach” to numerosity, or for that matter, any Rule 23 requirement.  Id. at 358.  Because Hayes did not show “either direct or circumstantial evidence specific to the problems and products involved in the litigation” to permit the trial court to determine the issue of numerosity, he did not meet his burden.  Id.

Finally, with respect to Wal-Mart’s argument concerning predominance, the Third Circuit punted.  It explained that because ascertaining the class is “logically antecedent” to determining predominance, the trial court should reevaluate that requirement on remand, should it find that Hayes satisfied the requirements of Rule 23(a).  Id. at 359.

After Hayes, and its predecessor Marcus, litigants in the Third Circuit should be cognizant of the standards for satisfying Rule 23’s requirements—and their consequent evidentiary burdens—before seeking class certification.