Third Circuit's Denial Of Rehearing In Class Action Strengthens "Ascertainability" Criterion

In a February 21, 2014 post we discussed a U.S. Court of Appeals for the Third Circuit decision, Carrera v. Bayer Corp. The court denied certification to a class of multivitamin purchasers because the plaintiffs offered no reliable and administratively feasible way to prove they had purchased the targeted product (and were thus members of the class).

On May 2, the Third Circuit denied rehearing en banc in Carrera. The written opinions accompanying the court's denial of rehearing reflect the rancor this issue can inspire among federal judges.

Denial of Rehearing Opinion. Nine judges voted to deny rehearing. Judges Smith, Chargares, and Scirica, all of whom sat on the panel that decided Carrera last August, signed an "Opinion Sur Denial of Panel Rehearing." The opinion reiterated that Carrera failed to meet his ascertainability burden. The judges also noted that the panel remanded the case to the district court where Carrera would have an opportunity to "submit a screening model specific to this case that can reliably distinguish between accurate affidavits and fraudulent or inaccurate ones."

Dissent from Denial of Rehearing. Judges Ambro, Rendell, Fuentes, and Chief Judge McKee voted to rehear Carrera. Judge Ambro penned an "Opinion Dissenting Sur Denial." Judge Ambro was the author of a 2012 opinion, Marcus v. BMW of NA, on which Carerra relied. In his dissent from rehearing denial, Judge Ambro stated that "Carerra goes too far" in applying the principles laid out in Marcus. He contrasted the "prolix" parameters of the Marcus class with the "simple" class definition in Carerra, implying that simplicity eases the ascertainability burden.

Judge Ambro was also troubled that because Bayer did not sell its multivitamins directly to consumers (which he termed "a fortuity"), it would not have sales records. He explained that in situations where "the defendant's actions—a defendant's lack of records and business practices," as the judge put it—"cause the difficulty, we should be flexible with our application" of ascertainability requirements. This is quite at odds with the Third Circuit's rationale in another August 2013 class-action decision, Hayes v. Wal-Mart. Judges Ambro, Fuentes, and Scirica presided over that appeal. In remanding the case back to the district court to determine ascertainability, Judge Scirica wrote, "the nature or thoroughness of a defendant’s recordkeeping does not alter the plaintiff’s burden to fulfill Rule 23’s requirements." Judge Ambro did not dissent in Hayes.

Call for Judicial Conference Review. In addition to calling for rehearing en banc in Carrera, Judge Ambro urged the Judicial Conference's Committee on Rules of Practice and Procedure to "look into . . . how easy (or hard) must this identification [i.e. if class members can be reasonably ascertained] be?"

What's Behind the Shift? Why did Judge Ambro switch from authoring Marcus and joining Judge Scirica's Hayes opinion to urging Judicial Conference review of ascertainability? His Carrera dissent's reference to the amicus brief of "this country's most recognized expert on procedure, Arthur Miller" offers a possible explanation. Miller and other academics "warn[ed] that Carrera threatens the viability of the low-value consumer class action."

Miller, who served for a time as Special Counsel to the class-action law firm Milberg LLP, has spoken openly about the need for plaintiffs' lawyers to serve as "private attorneys-general." Without easily certified class actions, these self-appointed regulators would have a much harder time performing this supposed public service while also raking in millions in attorneys' fees. Ascertainability, and the procedural due process principles that the requirement advances, are an affront to this "public law" view of class actions, as a 2009 law journal article explained.

Other federal judges, most notably California-based judges in food-labeling litigation, have engaged in similar hand-wringing over ascertainability's impact on consumer class actions. Perhaps Judge Ambro felt that his views in Marcus and Hayes strayed too far from what the legal and academic "establishment" felt was acceptable, and sought to correct that with his Carerra dissent.

Judge Ambro's dissent certainly provides intellectual support to class-action lawyers who must stave off defendants' ascertainability arguments as well as other federal circuit courts which will be addressing the issues. The Ninth Circuit will likely be next, given the split described by Jeffrey Margulies and Stephanie Stroup of Fulbright & Jaworski LLP in an April 25 WLF Legal Opinion Letter.

A Fundamental Question for Judges.In our opinion, the ascertainability issue is a basic one. And no judge who has pilloried the fundamental requirement that plaintiffs offer a way to identify class members has answered the elementary question that Margulies and Stroup asked in their WLF paper:

In an individual lawsuit, a defendant has the right to challenge a claim that a plaintiff purchased a product. Why, then, would a defendant in a class action be prevented from challenging the identical claim simply because it is being sued by a hundred or more plaintiffs?