Seventh Circuit Rejects Heightened “Ascertainability” Requirement in Class Actions – Part 1

July 31, 2015

gavel and scaleThe Seventh Circuit recently refused to adopt a heightened ascertainability standard that would effectively preclude certification of a wide variety of class actions – including many consumer class actions.  In Mullins v. Direct Digital, LLC, Case No. 15-1776 (7th Cir, July 28, 2015), the court dismantled the reasoning used by some courts – most notably the Third Circuit in Carrera v. Bayer Corp., 727 F.3d 300, 305-312 (3d Cir. 2013) – to deny class certification in cases where the identity of every class member is not known or knowable at the class certification stage. The Seventh Circuit also rejected the per se rule urged by the Third Circuit that a class cannot be certified where class membership can be established for some class members only by their own sworn testimony. The Seventh Circuit found that Rule 23 does not mention or imply a heightened ascertainability requirement; courts, however, already have adequate tools to ensure all parties are treated fairly in class cases without imposing this judicially-created additional requirement.

No Support for the Joint Support Claim

Plaintiff Mullins brought a consumer fraud class action on behalf of himself and other purchasers of defendant’s product, Instaflex Joint Support, which defendant claimed relieves joint discomfort. Mullins alleged that supplement is nothing more than a sugar pill and that there is no scientific support for defendant’s efficacy claims. The district court certified 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.”  Defendant moved for leave to appeal under Rule 23(f), which the appeals court granted “primarily to address the developing law of ascertainability.”

The “Doctrinal Drift” of Ascertainability

The Seventh Circuit explored the development of the ascertainability requirement from its origins through the present “high-water mark” represented by the Third Circuit’s formulation. Initially, courts applying the implicit ascertainability requirement focused on the adequacy of the class definition itself.  The common definitional problems highlighted by the ascertainability requirement included vagueness, subjectivity, and “fail-safe” classes (i.e. where inclusion in the class for any given class member depends on success on the merits).

The Third Circuit, however, recently announced a two-prong test for ascertainability: (1) the class must be “defined with reference to objective criteria (which is consistent with the long-established law in this area); and (2) there must be “a reliable and administratively feasible mechanism for determining whether putative class members fall within the class definition.” As an addendum to the second prong, the Third Circuit held that affidavits from putative class members – for example in situations where they purchased relatively low value consumer goods and did not retain a receipt – cannot as a matter of law satisfy the ascertainability requirement.  And, in some cases, even an affidavit accompanied by a receipt would not suffice.

Mullins Rejects the Third Circuit Test

Declining to adopt this “stringent version of ascertainability,” Mullins concluded that it “does not further any interest of Rule 23 that is not already adequately protected by the Rule’s explicit requirements.”  Moreover, this heightened requirement would effectively bar consumer class actions involving low-value products– such as the dietary supplement at issue – where consumers often do not retain receipts. Instead, courts should defer the decision about more detailed aspects of a claims process until later in the litigation when more information is known. “At bottom,” Mullins held, courts should “not let a quest for perfect treatment of one issue become a reason to deny class certification and with it the hope of any effective relief at all.”

[This is part one of a series discussing Mullins v. Direct Digital, LLC, Case No. 15-1776 (7th Cir, July 28, 2015). The next post will explore Mullins’ analysis of the policy bases underlying the heightened ascertainability requirement and why those bases do not justify a heightened ascertainability requirement.]