The “ascertainability” requirement for class certification is a crucial safeguard for both defendants and absent class members. There is some debate about its origin: some courts have held that it is implicit in Rule 23 that class members must be readily identifiable; others find ascertainability to be rooted in Rule 23(a)(1)’s numerosity mandate or Rule 23(b)(3)’s requirement that a class action be superior to other methods for resolving the controversy. Either way, courts agree that a class is ascertainable only if the class definition is sufficiently definite to make it administratively feasible for the court to determine by reference to objective criteria whether a particular person is a member of the putative class.

In two recent opinions—Hayes v. Wal-Mart Stores, Inc. (pdf), 2013 WL 3957757 (3d Cir. Aug. 2, 2013), and Carrera v. Bayer Corp., 2013 WL 4437225 (3d Cir. Aug. 21, 2013)—the Third Circuit vacated class certification orders because the plaintiffs hadn’t met their burden of proving that class members were ascertainable. These decisions are a goldmine for class action defendants: They provide great examples of the ascertainability requirement in action.

Continue Reading Third Circuit Rulings Give Teeth to Ascertainability Requirement for Class Certification

In litigation—as in war—it is natural to focus on winning today’s skirmish and to defer planning for battles that might not happen for weeks or months.  But that shortsightedness can lead to strategic blunders—as one class action plaintiff suing Capital One Bank and credit counseling agency InCharge Debt Solutions recently learned the hard way.

In King v. Capital One Bank (USA), N.A. (pdf) (W.D. Va.), the plaintiff, who had asked InCharge to help her with a debt-management plan for some debts she owed to Capital One, alleged that (among other things) the two companies had a hidden relationship that violated the Credit Repair Organizations Act.  After she filed a class action, the defendants moved to compel arbitration on an individual basis under the arbitration clause in her written contract with InCharge.

In response, the plaintiff argued that she never agreed to arbitrate because—despite InCharge’s evidence that it had a standard practice of providing its customers with contracts containing an arbitration clause—she somehow had not been given a copy.  This type of contract-formation challenge appears to be increasingly common after the Supreme Court’s decision in Concepcion confirmed that federal law generally requires enforcing agreements to arbitrate on an individual basis.  And in a narrow sense, the argument was successful: the court held that the plaintiff was entitled to a bench trial on whether she had agreed to arbitrate.

But in making this argument, the plaintiff failed to appreciate that it would sink her ability to maintain a class action.  For if the plaintiff hadn’t agreed to the standard contract, she wouldn’t be typical of the putative class of customers—the vast majority of whom would have received written contracts and thus be subject to enforceable arbitration agreements.  Nor could she represent a class of other customers who hadn’t been given copies of their contracts.  Even assuming that there were enough such customers to satisfy Rule 23(a)(1)’s numerosity requirement, identifying those customers and evaluating the varying scenarios in which a customer might not have signed a contract would require a host of individualized inquiries, thus preventing common issues from predominating over individualized ones.  For these reasons (and other defects in the putative class action), the court granted the defendants’ motion to strike the class allegations.

The takeaways from this case are that class action defendants should be alert for opportunities to turn plaintiffs’ arguments at one stage of the case against them in other stages and, when appropriate, should move to strike class allegations rather than play on the plaintiffs’ turf by waiting to resist a motion for class certification.  There frequently are openings for legal jujitsu when a plaintiff’s opposition to a motion to dismiss or to compel arbitration highlights individualized issues that can defeat class certification.  And defendants often can minimize their defense costs by immediately moving to strike the class allegations on those grounds, rather than waiting until the plaintiff has moved for class certification after potentially expensive and burdensome discovery.