Originally published by Barry Barnett.
A new decision proves that what students write in law journals can matter a great deal.
In Mullins v. Digital Direct, LLC, No. 15-1776 (7th Cir. July 28, 2015), the Seventh Circuit all but adopted a Yale law student’s analysis of, and rationale for freeing class action law from, a godawful “ascertainability” test that threatens to kill class cases involving low-dollar claims. A pair of other circuits had either championed the standard since creating it in 2012 (the Third Circuit) or quietly embraced it (the Eleventh).
Both the Yalie and the panel deserve our thanks.
Shaw’s item
The note in question — Geoffrey C. Shaw, Note, Class Ascertainability, 124 Yale L.J. 2354 (2015) — provides the following overview of itself:
In recent years, federal courts have been enforcing an “implicit” requirement for class certification, in addition to the explicit requirements established in Rule 23 of the Federal Rules of Civil Procedure. The ascertainability requirement insists that a proposed class be defined in “objective” terms and that an “administratively feasible” method exist for identifying individual class members and ascertaining their class membership. This requirement has generated considerable controversy and prevented the certification of many proposed classes. The requirement has taken a particular toll on consumer class actions, where potential class members are often unknown to the representative plaintiffs, often lack documentary proof of their injury, and often do not even know they have a legal claim at all.
This Note explores the ascertainability requirement’s conceptual foundations. The Note first evaluates the affirmative case for the requirement and finds it unpersuasive. At most, Rule 23 implicitly requires something much more modest: that classes enjoy what I call a minimally clear definition. The Note then argues that the ascertainability requirement frustrates the purposes of Rule 23 by pushing out of court the kind of cases Rule 23 was designed to bring into court. Finally, the Note proposes that courts abandon the ascertainability requirement and simply perform a rigorous analysis of Rule 23’s explicit requirements. This unremarkable approach to class certification better reflects what the Rule says and better advances what the Rule is for.
The case
The Seventh Circuit’s ruling came in a lawsuit about a diet supplement. The pills contained glucosamine sulfate, which the seller, Digital Direct, touted for its ability to strengthen joints. Vince Mullins paid something like $70 for a big bottle of the stuff.
Mullins sued Digital Direct for consumer fraud, urging that glucosamine sulfate did nothing for flexibility or cartilage health. He also sought, and the district court granted, an order certifying a damages class of all purchasers of Digital Direct‘s worthless goods.
The Seventh Circuit affirmed. With Circuit Judge David Hamilton (another Yalie) writing for the panel, the court countered the Third Circuit’s view of “ascertainability” at length.
Old school ascertainability — and the new kind
Judge Hamilton started by noting that Rule 23 requires a clear definition of who the class includes. A class definition that uses vague terms (e.g., “buyers of sour-tasting beer”), depends on the class members’ state of mind or other subjective criteria (“buyers of sour beer who didn’t enjoy the taste”), or excludes class members who lose on the merits (“buyers of sour beer who didn’t enjoy the taste but couldn’t persuade the jury to do anything about it”).
The court then turned to the Third Circuit’s “heightened ascertainability requirement” in Marcus v. BMW of North America, LLC, 687 F.3d 583 (3d Cir. 2012), and its offspring. The sister circuit’s test went too far, Judge Hamilton wrote, when it demanded a “reliable and administratively feasible” method for identifying class members who have valid claims:
This second requirement sounds sensible at first glance. Who could reasonably argue that a plaintiff should be al- lowed to certify a class whose members are impossible to identify? In practice, however, some courts have used this requirement to erect a nearly insurmountable hurdle at the class certification stage in situations where a class action is the only viable way to pursue valid but small individual claims.
Mullins, slip op. at 10.
“Err systematically against certification”
Nor did the court find policy arguments for a “stringent” kind of ascertainability test convincing. Citing Mr. Shaw’s note, the panel observed that if courts focus on the ease or difficulty of proving each class member’s right to recover, they “will err systematically against certification.”Id. at 17.
The court also rejected arguments about the “unfairness” to class members of allowing a class action to go forward. In consumer class actions like this one, class members suffer no harm that would legitimately concern them as a result of their inclusion in the class. They would never pursue such small-dollar claims on their own and (as a result of low participation rates in the claims administration process) lose nothing even if some unscrupulous people submit false claims. See id. at 24 (“To deny class certification based on fear of dilution would in effect deprive bona fide class members of any recovery as a means to ensure they do not recover too little.”).
Perfect v. good
As Judge Hamilton summed up, “[w]hen it comes to protecting the interests of absent class members, courts should not let the perfect become the enemy of the good.” Id. at 20.
To which I say “amen”.
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