“Ascertainability” Emerges as Key Battleground in Class Actions Involving Low-Cost Consumer Goods. Grocery store shelves have emerged as the favored hunting ground of the plaintiff’s consumer class action bar, which has attacked labels on virtually every category of food and beverage, cosmetics, and over-the-counter medications. A defining feature of these cases is that they involve low-cost consumables sold in large volumes. As discussed below, this combination leads to high aggregate exposure, but makes identifying putative class members virtually impossible.
A growing number of federal courts have seized on this identification problem as a basis to find that plaintiffs fail to meet the so-called “ascertainability” requirement. Many courts have recognized that a class, in order to be properly certified, must be “readily ascertainable based on objective criteria.” Marcus v. BMW of N. Am., LLC, 687 F.3d 583, 592 (3d Cir. 2012) (listing cases). In applying this ascertainability requirement, certain courts focus only on the plaintiff’s express definition of the class, holding that if the definition appears to be based on objective criteria, then the class is ascertainable. See, e.g., Guido v. L’Oreal, USA, Inc., CV 11-1067 CAS JCX, 2013 WL 3353857 (C.D. Cal. July 1, 2013) (holding that class was ascertainable where definition included all purchasers who bought shampoo after a certain date). But other courts require more and look beyond the class definition at whether the plaintiffs have evidence, such as purchase receipts, that would prove which class members meet the class definition.
The Third Circuit has staked out the most aggressive pro-defense stance in applying the ascertainability requirement to deny certification of consumer class action claims. Last year, it reversed an order certifying a class of purchasers of multivitamin supplements, holding that neither retailer records nor class member affidavits would suffice to ascertain class membership. Carrera v. Bayer Corp., 727 F.3d 300, 308 (3d Cir. 2013). The plaintiff alleged that defendant Bayer Healthcare had falsely claimed that WeightSmart, a multivitamin supplement, enhanced metabolism by including a green tea extract. Id. at 304. The plaintiff defined the class as all people who purchased WeightSmart in Florida. Id. It was undisputed that the buyers did not have “documentary proof of purchase, such as packaging or receipts,” and Bayer had “no list of purchasers because . . . it did not sell WeightSmart directly to consumers.” Id.
The plaintiffs offered two types of evidence to satisfy the ascertainability requirement. Id. at 308. First, they argued that they could establish class membership using “retailer’s records of sales made with loyalty cards, e.g., CVS ExtraCare cards, and records of online sales.” Id. Although the court said that “[d]epending on the facts of a case, retailer records may be a perfectly acceptable method of proving class membership,” the plaintiffs failed to introduce evidence in support of their class certification motion showing that the retailer at issue actually had such records. Id. at 308–09. The court therefore required more than a theoretical basis to establish class membership and required evidence that the method was feasible. See id.
Second, the plaintiffs proposed using affidavits from potential class members attesting they had bought the product. Id. at 309. The court rejected this approach also because an affidavit would not address a core concern of ascertainability, which is “that a defendant must be able to challenge class membership.” Id. The plaintiffs argued that because Bayer’s liability was based on total sales and did not depend on the number of individual claims, unreliable affidavits would not affect Bayer’s total liability. Id. But the court held that fraudulent affidavits would harm other class members by reducing their recovery, which could also harm Bayer if class members argued they were not bound by the settlement due to inadequate representation. Id. The court also rejected the plaintiffs’ claim that the class-action administrator, a consultant hired by the plaintiffs, could weed out fraudulent claims, stating that the administrator’s method was not “specific to this case” and plaintiffs had “no way to determine the reliability of such a model.” Id. at 311. Based on this reasoning, the Third Circuit reversed the district court’s certification order, but directed the district court to give the plaintiffs limited discovery on the issue of ascertainability and another opportunity to meet the ascertainability requirement. On May 2, 2014, the Third Circuit denied a petition for rehearing en banc.
Several district courts have also recently denied class certification for similar reasons. In Astiana v. Ben & Jerry’s Homemade, Inc., the plaintiff alleged that Ben & Jerry’s had falsely marketed its ice cream as “all natural” even though it contained “alkalized cocoa” produced with “synthetic” agents and sought to certify a class of California consumers who had bought Ben & Jerry’s ice cream. 2014 WL 60097, at *1 (N.D. Cal. Jan. 7, 2014). The court denied certification because, among other reasons, the plaintiff had “not shown that a method exists for determining who, among the many California purchasers of Ben & Jerry’s, fits within the proposed class.” Id. at *3. Ben & Jerry’s used alkalized cocoa from 15 different suppliers, and not all the alkalized cocoa was produced using a synthetic ingredient. Id. Because the plaintiff had not identified any method to determine which consumers had bought ice cream with the synthetic ingredient and which had not, the court held the class was not ascertainable. Id.
The defendant in another case, Karhu v. Vital Pharmaceuticals, Inc., manufactured and marketed a dietary supplement called VPX Meltdown Fat Incinerator, claiming that it could “burn fat” and help consumers lose weight quickly. 2014 WL 815253, at *1 (S.D. Fla. Mar. 3, 2014). The plaintiff alleged the product was ineffective, and sought to certify a nationwide class of buyers. Id. The court held that the class was not ascertainable because consumers “probably have not retained their receipts” and the manufacturer sold only to retailers and therefore did not have records of consumers purchases. Id. at *3. Affidavits from class members were also inadequate because they “would deprive [the defendant] of its due process rights to challenge the claims of each putative class member” or, if the defendant were allowed to challenge the affidavits, would “require a series of mini-trials and defeat the purpose of class-action treatment.” Id.
The court in In re POM Wonderful LLC, 2014 WL 1225184 (C.D. Cal. Mar. 24, 2014) decertified a class because, among other reasons, the putative class members would not have retained records of their purchases of a consumer juice product. Id. at *5–6. In doing so, the court identified three factors relevant to the ascertainability inquiry: (1) the price of the product; (2) the range of potential or intended uses of a product; and (3) the availability of purchase records. Id. at *6. The court applied this standard and held that the case fell “well toward the unascertainable end of the spectrum.” Id. See also Sethavanish v. ZonePerfect Nutrition Co., 2014 WL 580696, at *4–6 (N.D. Cal. Feb. 13, 2014) (denying class certification in a case involving an “all natural” nutrition bar because there were no records of consumer purchases”).
This defense-oriented trend has not been universal. In Ebin v. Kangadis, Judge Rakoff of the Southern District of New York certified a class of olive oil buyers. 2014 WL 737960 (S.D.N.Y. Feb. 25, 2014). Although he acknowledged that “ascertainability difficulties” were “formidable” and that potential class members likely had no objective evidence of their purchases, he found that the class was ascertainable because to hold otherwise “would render class actions against producers almost impossible to bring.” Id. at *5.
As ascertainability comes to the fore as a ground to deny class certification, we expect additional circuit courts to weigh in. It remains to be seen if they will join the Third Circuit or create a split that could make the plaintiffs’ chosen forum outcome-determinative in these cases.