Seventh Circuit Rejects Heightened Ascertainability Requirement for Class Action Certification | Practical Law

Seventh Circuit Rejects Heightened Ascertainability Requirement for Class Action Certification | Practical Law

The US Court of Appeals for the Seventh Circuit held in Mullins v. Direct Digital, LLC that Federal Rule of Civil Procedure (FRCP) 23(b)(3) does not impose a heightened "ascertainability" requirement. In so holding, the Seventh Circuit refused to adopt recent Third Circuit precedent.

Seventh Circuit Rejects Heightened Ascertainability Requirement for Class Action Certification

by Practical Law Litigation
Published on 03 Aug 2015 • USA (National/Federal)
The US Court of Appeals for the Seventh Circuit held in Mullins v. Direct Digital, LLC that Federal Rule of Civil Procedure (FRCP) 23(b)(3) does not impose a heightened "ascertainability" requirement. In so holding, the Seventh Circuit refused to adopt recent Third Circuit precedent.
On July 28, 2015, in Mullins v. Direct Digital, LLC, the US Court of Appeals for the Seventh Circuit rejected the application of a heightened ascertainability requirement under FRCP 23(b)(3) (No. 15-1776, (7th Cir. Jul. 28, 2015)). Instead, the court held that the explicit requirements of FRCP 23 are sufficient to ensure that a class is defined clearly and to balance the countervailing interests affecting whether a class action is the best method for fairly adjudicating a dispute.
The plaintiff here commenced an action alleging that the defendant fraudulently misrepresented the benefits of its product, Instaflex Joint Support. The plaintiff argued that the defendant was liable for consumer fraud under various state consumer protection laws and moved to certify a class of consumers "who purchased Instaflex within the applicable statute of limitations of the respective Class States for personal use until the date notice is disseminated."
The district court certified the class under FRCP 23(b)(3). The defendant took an interlocutory appeal under FRCP 23(f). It contended that the district court abused its discretion by certifying the class without first finding that the class was ascertainable. The defendant also argued that the efficacy of a health product cannot qualify as a common question under FRCP 23(a)(2).
The Seventh Circuit affirmed. It explained that under its case law, the ascertainability of a class depends on the definition of the class in a clear manner and based on objective criteria. A class will be certified if the definition identifies a group of individuals that have been harmed during a particular time frame, in a particular location and in a particular way.
In this case, the proposed class is comprised of individuals who purchased the defendant's product during a particular time period, in particular locations and were harmed by the misrepresentations that the defendant made about the product. Therefore, the class met the Seventh Circuit's definition of ascertainability and was properly certified.
The court rejected the defendant's arguments, based on Third Circuit case law, that:
  • Ascertainability also required that the plaintiffs show a reliable and administratively feasible way to determine whether a particular person is a member of the class
  • Affidavits from putative class members are, as a matter of law, insufficient to determine whether those individuals are actually class members.
Imposing a more stringent version of ascertainability does not further any interest of FRCP 23 that is not already adequately protected by the rule's explicit requirements, the Seventh Circuit held. The court also noted that the more stringent rule would effectively bar consumer class actions concerning low cost goods and services.
The Seventh Circuit rejected several policy arguments supporting a heightened ascertainability requirement, finding that:
  • Administrative convenience is better addressed by the explicit requirements of FRCP 23(b)(3), including that the class device be superior to other methods of resolving the dispute, than by heightened ascertainability.
  • Following the traditional definition of ascertainability does not prejudice the interests of absent class members. Heightened ascertainability comes close to requiring actual notice to protect the interests of absent class members but fails to consider that without certification, class members with valid claims would not recover at all.
  • There is no empirical evidence of any significant risk that individuals will submit false affidavits in order to recover and thereby dilute the share of recovery for true class members. Moreover, courts can establish other safeguards, like sampling for fraud detection, to combat fraud. Additionally, self-serving affidavits are frequently relied on in other contexts, like as support for a motion for summary judgment.
  • A heightened ascertainability standard is not needed to guarantee defendants due process. Due process does not require that the identity of class members be perfectly ascertained at certification. Rather, it requires that the defendant have a fair opportunity to present its defenses when putative class members come forward.
The Seventh Circuit also rejected the defendant's argument regarding commonality. The court found that the question at issue was not whether the defendant's product was effective for any individual consumer but whether the statements that the defendant made regarding the product, for example that it had been "scientifically formulated" to relieve joint discomfort, were false or misleading because there was no scientific support for them. The court affirmed the order granting class certification.
Practitioners handling class actions should be aware of the circuit split and, if litigating outside the Third or Seventh Circuit, prepared to argue for or argainst either side. Class action attorneys should also continue to monitor the split as other circuits, and possibly the Supreme Court, address the issue.