On The Case

SCOTUS case will test Justice Gorsuch’s appetite for class action limits

(Reuters) - Justice Neil Gorsuch of the U.S. Supreme Court doesn’t have much of a record on class actions. As a private lawyer at Kellogg Huber Hansen Todd Evans & Figel between 1995 and 2005, Gorsuch wrote a couple of amicus briefs for the U.S. Chamber of Commerce, asking to tighten requirements in securities class actions. He wrote a handful of opinions in class action cases in his last job, as a judge on the 10th U.S. Circuit Court of Appeals, none espousing an overarching policy on class actions as a vehicle of justice. Both friends and foes of the newest justice consider Gorsuch to be pro-business, but the truth is that we don’t know yet if he will prod his fellow justices to revive Justice Antonin Scalia’s years-long campaign to rein in class actions.

An important early indicator arrived last month at the Supreme Court. Conagra Brands is petitioning the justices to review a 9th Circuit opinion certifying a class of Wesson cooking oil purchasers who claim they were deceived by the product's "all natural" labeling. Conagra, represented at the Supreme Court by Jones Day and McGuireWoods, contends that the justices must step in to resolve a deep circuit split on whether lead plaintiffs in class actions must show a feasible way to identify absent class members in order to be certified to litigate as a class.

Ascertainability, as this issue is known, has been a particularly hot controversy since 2015, when the 7th Circuit roundly rejected the 3rd Circuit’s conclusion that classes cannot be certified unless plaintiffs offer a “reliable and administratively feasible” way to determine who's in the class. The 3rd Circuit said in 2013’s Carrera v. Bayer that plaintiffs’ affidavits are not sufficient to establish class membership. The 7th Circuit said they were in 2015's Mullins v. Direct Digital.

The division has since deepened amongst the federal circuits, as Conagra’s brief points out. The 2nd, 4th and 11th Circuits use ascertainability tests in line with the 3rd Circuit’s. The 6th Circuit – and the 9th Circuit in the Conagra case – agree with the 7th Circuit.

“This disagreement is intolerable,” Conagra said in its petition for certiorari. “Class certification is the most important decision in any class action, and now it turns on venue in many, many cases. This case - involving those who bought ‘100% Natural’ Wesson Oil in 11 states over the past decade or so - provides this court with the perfect opportunity to finally end the dispute over this fundamental question of class-action law.”

An intractable circuit split on an issue affecting scores of defendants and thousands of consumers might seem to be a no-brainer for Supreme Court review, but in 2016, the justices declined to grant certiorari to defendants in the 7th Circuit case that first created the division in federal appellate courts, as well as a 6th Circuit case that widened the divide. Those denials both came after Scalia’s death in February 2016.

Conagra’s petition argues that its 9th Circuit case presents the ascertainability issue more cleanly than the 6th and 7th Circuit class actions the justices decided not to review. In the previous cases, Conagra said, plaintiffs actually had ways to identify class members through existing records. In contrast, the company said, there is truly no feasible way to figure out who bought low-cost Wesson cooking oil years ago.

And meanwhile, according to Conagra, it’s become increasingly evident that certification of consumer class actions depends on geography. “Courts that require plaintiffs to propose a reliable, feasible method of identification have routinely denied class certification,” Conagra said. “By contrast, classes like these sail through in jurisdictions where courts ask only for an objectively defined class.”

The cert petition lists nearly a dozen trial court rulings in each category to prove Conagra’s point. “This has to stop,” the brief said. “There is no question that class certification matters, that courts disagree about whether a class of impossible-to-identify plaintiffs can be certified, or that this disagreement leads to conflicting outcomes in indistinguishable cases. This case - the paradigmatic consumer class action at the heart of this disagreement - gives the court an ideal vehicle through which to end the confusion.”

The plaintiffs suing Conagra, represented at the 9th Circuit by Grant & Eisenhofer and Milberg, have brought in New York University law professor Samuel Issacharoff to oppose Conagra’s cert petition. That’s undoubtedly a smart move: Issacharoff fended off Supreme Court review in the two previous ascertainability cases before the justices and has become a kind of human firewall between consumers and corporations bent on restricting class actions through appellate litigation.

Issacharoff’s opposition brief in the Conagra case isn’t due until mid-June, according to the Supreme Court docket, but he hinted at one of his arguments at a class action conference I attended last week. Issacharoff was moderating a panel on using social media to expand class members’ participation in class actions. He hypothesized that Big Data could moot the debate over ascertainability by providing class counsel a means of identifying purchasers of even the humblest, least expensive products. If data collectors such as store loyalty programs, credit card records and point-of-sale inventory systems can pinpoint who bought which products, there’s no need for the Supreme Court to wade into the policy morass.

Conference goers seemed to think the Supreme Court will once again decide not to grant review of the ascertainability issue. When Bethany Lukitsch of McGuireWoods, moderating a panel on consumer class actions, asked the audience if it expected the justices to take the Conagra case, only a few people raised their hands. Conventional wisdom among class action cognoscenti is that the Supreme Court will leave it to Congress to decide whether to clarify the class action rules. (As you know, the Advisory Committee on the Rules of Civil Procedure recently approved tweaks to Rule 23, which governs class actions, but the rule changes do not address ascertainability; the House of Representatives’ Fairness in Class Action Litigation Act, passed in March, includes an ascertainability requirement adopting the 3rd Circuit’s language.)

If Justice Scalia were alive, I bet he’d be pushing for the Supreme Court to take the Conagra case. I’m sure the business lobby is hoping Justice Gorsuch picks up right where his predecessor left off.