On The Case

3rd Circuit backtracks (a teeny bit) on ascertainability, adding to SCOTUS drama

(Reuters) - It’s not often that U.S. Supreme Court briefing on whether to grant review of a procedural class action issue can fairly be described as dramatic, but this summer’s plot twists on class ascertainability have been practically soap operatic. In the latest development, the 3rd U.S. Circuit Court of Appeals ruled Wednesday that sworn affidavits from plaintiffs can, in certain circumstances, satisfy the circuit’s test for identifying class members.

Okay, it’s not exactly Game of Thrones stuff. But the 3rd Circuit’s decision, in City Select Auto Sales v. BMW Bank of North America, seems to soften that court’s hard stance on ascertainability, which has been explicitly rejected by several other federal circuits. That circuit split is at the heart of a pending petition for Supreme Court review by Conagra Brands, which wants the justices to reconsider a 9th Circuit decision, Briseno v. Conagra, upholding certification of a class of Wesson Oil purchasers with false labeling claims. Conagra contends those consumers can’t be identified without resort to sworn affidavits, which, it contends, are not a feasible and reliable way to figure out who’s in the class.

The new 3rd Circuit decision is the third opinion in just the past five weeks to rejigger federal appellate precedent on class action ascertainability. In July, as you probably recall, the 2nd and 6th Circuits both issued decisions revisiting their standards for a reasonable and feasible means of identifying class members. The 2nd Circuit, which had been counted as an ascertainability ally of the 3rd Circuit, said specifically in In re Petrobras Securities, that it was instead aligned with the 7th and 9th Circuits in rejecting the 3rd Circuit test. Days later, the 6th Circuit – which had previously said it saw no need to adopt the 3rd Circuit’s heightened ascertainability standard – agreed in Sandusky Wellness Center v. ASD Specialty Healthcare that plaintiffs’ sworn affidavits weren’t sufficient to ascertain class membership.

Lawyers on both sides of the Conagra case at the Supreme Court, Shay Dvoretsky of Jones Day for Conagra and Samuel Issacharoff of New York University for the class plaintiffs, filed supplemental briefs last month to address the 2nd and 6th Circuit decisions. Issacharoff emphasized the 2nd Circuit’s reference to a “growing consensus” among federal courts that the 3rd Circuit imposed too stringent a test for ascertainability, arguing that there’s no need for the Supreme Court to step in when the lower courts are figuring things out themselves. Dvoretsky countered that the two opinions show the turmoil and uncertainty that will roil the lower courts unless the Supreme Court takes over.

The new 3rd Circuit ruling is going to prompt another round of supplemental Supreme Court briefing, at least from the plaintiffs. Issacharoff told me in an email Wednesday that his side will address the 3rd Circuit decision in the next few days. He declined to preview what his brief will say, but considering that he’s already advised the Supreme Court that it should hold off and give the 3rd Circuit a chance to rethink its ascertainability precedent, it’s a good bet that Issacharoff will argue the new decision shows the court is moving in the right direction so the circuit split will heal itself. (Dvoretsky declined via email to comment on Conagra’s plans.)

Interestingly, the 3rd Circuit opinion, written by Judge Anthony Scirica for a panel that also included Judges Julio Fuentes and Cheryl Ann Krause, doesn’t actually acknowledge any backtracking on ascertainability. The opinion explains why the 3rd Circuit imposed a class certification requirement that plaintiffs provide a reliable and administratively feasible way to ascertain class members: to assure opt out rights for absent class members; to protect defendants by assuring that all potential claimants are bound by final judgment in the case and to preserve the judicial efficiencies class actions were created to promote. In the three consumer class actions in which the 3rd Circuit set out its ascertainability test, the new decision said, plaintiffs failed to provide a means of narrowing the universe of potential class members enough to satisfy those principles.

City Select, which claims BMW Bank violated the Telephone Consumer Protection Act by sending unauthorized faxes, also proposed identifying class members through sworn affidavits – but only after winnowing potential claimants via a database of fax contacts. The trial judge in the class action denied class certification, holding that 3rd Circuit precedent prohibits the use of affidavits to ascertain class members. In the new opinion, Judge Scirica said the circuit’s previous ascertainability rulings “do not categorically preclude affidavits from potential class members.”

I should note that Judge Scirica wrote the 3rd Circuit’s seminal opinion on ascertainability, 2013’s Bayer v. Carrera, as well as the brief denial of plaintiffs’ petition for en banc reconsideration of the decision. One of the judges who disagreed with the decision not to rehear Carrera en banc was Judge Fuentes, who joined a dissent warning of the consequences of requiring consumers in small-dollar cases to meet an essentially impossible standard.

In a concurrence to the new opinion in the City Select case, Judge Fuentes called on his 3rd Circuit colleagues to heed precedent from the 2nd, 7th and 9th Circuits and abandon the 3rd Circuit’s ascertainability test. (Judge Fuentes included the 6th Circuit but after that court’s Sandusky decision last month, I’m not sure it belongs on the list.)

Judge Fuentes’ concurrence is a handy recap of all of the episodes to date in the appellate ascertainability soap opera. The big question this fall will be whether the justices decide they’ll handle the series finale.