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July 31, 2019

Stroock Special Bulletin

By: Brian C. Frontino, Stephen J. Newman, Arjun P. Rao, Julia B. Strickland, Quyen T. Truong

On July 29, 2019, the California Supreme Court weighed in on an important issue of class action jurisprudence:  whether the proponent of the class must present evidence that the proposed class is ascertainable and that class members can be identified without excessive inconvenience or administrative burden.  Following a pro-plaintiff line of federal caselaw, the California Supreme Court held in Noel v. Thrifty Payless, Inc., No. S246460 (Cal. July 29, 2019), that the class proponent’s burden is merely to describe a class that might in the future be identified by reference to objective criteria.  There is no obligation to show that notice to the class is administratively feasible, as long as publication notice may enable potential class members to identify themselves as class members.

In Noel, the plaintiff claimed that a seller of inflatable pools misrepresented the size of the pool in a photograph on the product’s packaging, and asserted class claims under California’s Unfair Competition Law, False Advertising Law and Consumers Legal Remedies Act.  Plaintiff sought to certify a class of all individuals who purchased the product within the statute of limitations.  Defendant opposed class certification on the grounds that it never maintained records reflecting who specifically purchased the product, even though it had records showing the total number of products sold and returned.  The trial court and the Court of Appeal agreed with defendant, finding that plaintiff failed to produce sufficient evidence of how class members might be ascertained or how they might be notified efficiently of the pendency of the litigation.  The California Court of Appeal expressed concern that, without such evidence and a robust notice program, purchasers might be deprived of due process because a final judgment would be conclusive as to all class members, even those who did not receive actual notice.

The California Supreme Court reversed, ruling that it was not plaintiff’s burden to prove that class members were administratively ascertainable at the class certification stage.  The Court acknowledged the split of authority within the federal system on this question, but found that the better line of cases are those from the federal Seventh Circuit, which imposes only a minimal ascertainability requirement on class plaintiffs.  Following Mullins v. Direct Digital, LLC, 795 F.3d 654 (7th Cir. 2015), the California Supreme Court found that plaintiff’s only burden is to define the class with reference to objective criteria that did not depend on reaching any conclusions as to liability.  So long as those criteria are sufficiently precise to allow class members to self-identity, then the class is sufficiently ascertainable at the class certification stage.  It is not necessary that direct notice to all class members be possible where publication notice can reach “a substantial percentage of the class members,” the California Supreme Court concluded.

The Court expressly rejected a line of cases from the federal Third Circuit, such as Marcus v. BMW of North America, LLC, 687 F.3d 583 (3d Cir. 2012), Hayes v. Wal-Mart Stores, Inc., 725 F.3d 349 (3d Cir. 2013), and Carrera v. Bayer Corp., 727 F.3d 300 (3d Cir. 2013), which require class representatives to prove both that the class has been “defined with reference to objective criteria” and that there is “a reliable and administratively feasible mechanism for determining whether putative class members fall within the class definition.”  Under Noel, the only grounds for an ascertainability challenge are that the class definition either improperly makes use of subjective factors (such as class members’ state of mind) or is impermissibly “failsafe,” which is when class membership can be determined only after there is a liability determination.  For example, “All purchasers of the product between 2015 and 2019” defines an ascertainable class under Noel, but “All purchasers of the product who relied on the deceptive photo on the packaging” does not define an ascertainable class.

Difficulties in giving class notice, the California Supreme Court found, will rarely provide grounds to defeat class certification.  Noel contains sweeping language suggesting that publication notice will almost always be appropriate for large classes of anonymous retail consumers, particularly when modern advertising techniques are used to reach potential class members.  As long as the notice contains enough information for class members to self-identify, the ascertainability requirement will be satisfied.  At that point, the burden shifts to the defendant to prove that “unusually difficult manageability problems” justify denying class treatment.

Noel will make it much harder for defendants to defeat class certification in California state court.  Accordingly, it can be expected to result in plaintiffs filing more cases in state court in the first instance, and defendants attempting more frequently to remove cases to federal court under the Class Action Fairness Act.  Perhaps more significantly, the California Supreme Court’s comprehensive analysis of the split among federal courts on the ascertainability issue could be persuasive in federal cases, and potentially could result in retrenchment of ascertainability requirements in those federal courts that presently apply them.

In short, Noel is a significant development in class action jurisprudence that favors class action plaintiffs.  Please let us know if you have any questions or would like to discuss the Noel decision or any other matter in greater detail.


For More Information:

Brian C. Frontino

Stephen J. Newman

Arjun P. Rao

Julia B. Strickland

Quyen T. Truong

This article is for general information purposes only. It is not intended as legal advice, and you should not consider it as such.