Class Actions
| Publication year | 2022 |
Class Actions
Thomas M. Byrne
Stacey McGavin Mohr
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The United States Court of Appeals for the Eleventh Circuit's 2021 class-action work featured an important decision on the existence of an independent ascertainability requirement for class certification. In an abrupt reversal of two unpublished opinions acknowledging the existence of such a requirement, the court aligned itself with most circuits that have addressed the question in demoting the ascertainability of class membership to a factor to be considered in establishing the manageability of a class action, rather than an independent requirement. The court's other significant cases concerned class settlements and standing.1
A. Administrative Feasibility: Cherry v. Dometic Corp.
The Eleventh Circuit joined with the majority of circuits in holding that a threshold determination that identifying class members is
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administratively feasible is not a separate requirement for class certification. The ruling, in the closely watched case of Cherry v. Dometic Corporation,2 which attracted numerous amicus briefs, represents a minor victory for the plaintiffs' class-action bar. The issue before the court was framed in terms of the "ascertainability" requirement for membership in a class action.3 The specific issue was whether the ascertainability requirement means not only that the members of a class are capable of being determined, but also that class membership can be determined without extensive factual inquiry.4 In an opinion by Chief Judge William Pryor, the court held that Federal Rule of Civil Procedure 235 imposed no such heightened administrative feasibility requirement but that administrative feasibility may be considered in weighing the manageability criterion for Rule 23(b)(3) classes.6 In so holding, the court rejected the unpublished opinions of two Eleventh Circuit panels that had held to the contrary, Karhu v. Vital Pharmaceuticals, Inc.7 and Bussey v. Macon County Greyhound Park, Inc.8
The court's opinion tracks the reasoning of the leading opinion, rejecting the heightened ascertainability requirement, Mullins v. Direct Digital, LLC,9 which forcefully counters the leading opinion to the contrary in Carrera v. Bayer Corp.10 The court in Cherry, however, based its reasoning primarily on the text of Rule 23, while the Mullins court proceeded from the broader policymaking premise that certifying small-dollar class actions is a public good, a form of remedy for wrongdoing that may be imposed before any wrongdoing has actually been proven in accord with due process.11
Like the Mullins court, the court in Cherry posited that a class must be adequately defined and clearly ascertainable, based on objective
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criteria.12 No court disagrees. Like Mullins, Cherry rejects any additional requirement that class membership be determinable without extensive individual factual inquiry.13 Both courts hold that administrative feasibility may be considered in determining whether a proposed class action is superior to other available methods of adjudication, but assume that the problems in identifying class members would not be relevant to determinations of commonality (as reinvigorated by Wal-Mart Stores, Inc. v. Dukes14 ) or typicality, under Rule 23(a).15 Additionally, like Mullins, Cherry appears to give short shrift to class members' core due-process rights to notice and opportunity to opt out of the Rule 23(b)(3) class action.16 If class members cannot be identified, then adequate notice to them is obviously problematic. The court in Cherry also seems to overestimate the rigor (or lack thereof) with which the superiority requirement has been applied historically in district courts.
Administrative infeasibility, of course, would be relevant as well to Rule 23(b)(3)'s requirement that common issues predominate over individual issues, but that is not directly addressed in the court's opinion.
The district court in Cherry had refused to certify a Rule 23(b)(3) product liability class involving claims that the defendant's refrigerators had a defect that posed a fire risk.17 The proposed class consisted of all persons who had purchased the products in selected states since 1997. The district court agreed with the defendant that the plaintiffs failed to show that their proposed method of the identification of class members would be workable. The court then dismissed the case on erroneous jurisdictional grounds, based on the denial of class certification, which does not divest a district court of subject-matter jurisdiction under the Class Action Fairness Act (CAFA).18 The Eleventh Circuit reversed and remanded for further proceedings consistent with its opinion.19
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The Eleventh Circuit joined the Second, Sixth, Seventh, Eighth and Ninth Circuits in rejecting heightened ascertainability.20 The First, Third and Fourth Circuits have adopted the requirement.21 The deep circuit split seems overdue to be resolved by the Supreme Court of the United States. In 2021, the Supreme Court passed on an opportunity to consider the application of Rule 23's certification requirements to putative classes with unidentifiable class members. In TransUnion LLC v. Ramirez,22 the Court did not reach the question of whether Rule 23(a)'s typicality requirement was met where few members of the putative class shared the named plaintiff's alleged injury. The Court instead ruled that the majority of class members did not have Article III standing and remanded for consideration of the propriety of certification on that basis.23
B. Adequacy of Class Representative: Huang v. Equifax Inc. (In re Equifax Inc. Customer Data Security Breach Litigation)
Huang v. Equifax Inc. (In re Equifax Inc. Customer Data Security Breach Litigation)24 upheld the district court's approval of a class settlement arising out of the Equifax data breach—except for the incentive awards to the class representatives, as to which the court reversed the district court in light of the Eleventh Circuit's 2020 decision in Johnson v. NPAS Solutions, LLC.25
The settlement in question arose from "scores of class actions" filed in the wake of a 2017 data breach affecting Equifax and its affiliates.26 The cases were consolidated in the United States District Court for the
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Northern District of Georgia, and the consolidated complaint filed on behalf of consumers included claims under the Fair Credit Reporting Act (FCRA) and various state consumer-protection and data-breach statutes, as well as claims for negligence and negligence per se. The settlement—which followed eighteen months of negotiations between the parties and with various state and federal regulators, as well as mediation before a retired federal judge—bound approximately 147 million class members and provided for reimbursement for documented out-of-pocket losses; compensation for up to twenty hours spent dealing with either identity theft or taking preventative measures; free credit monitoring and identity theft prevention services for ten years (with an option for alternative cash consideration); and seven years of identity restoration services. The settlement did not provide for any potential reversion to Equifax and further required that Equifax spend at least $1 billion on data security over five years.27
The settlement drew objections from 388 class members, six of whom appealed following the district court's approval of the settlement.28 In a lengthy opinion, the Eleventh Circuit affirmed the district court's approval of the settlement except with respect to the incentive awards to the class representatives.29
First, citing its recent en banc decision in Muransky v. Godiva Chocolatier, Inc.,30 the court rejected the argument that class members who did not actually have their identities stolen lacked the injury-in-fact required to establish Article III standing.31 The court similarly rejected the novel argument that the settlement of a class action ends the Article III "controversy" to strip the court of jurisdiction.32
Second, the court found no abuse of discretion in the district court's requirement that each objector provide the objector's name, address, signature, grounds for objection, previous objections in class actions, and potential deposition dates.33 The requirements "were not particularly burdensome," the court decided, and the district court had imposed them for the stated purpose of "avoiding a 'chaotic process.'"34 The court suggested that the sheer size of the class nudged these
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measures, similar to some that have been criticized by other courts, into the realm of the court's discretion.35
Third, the court found no reversible error in the district court's adoption of an order "ghostwritten" by the plaintiffs' counsel.36 "Ghostwriting" by litigants is generally disfavored, but the critical question is "whether 'the process by which the judge arrived at the order was fundamentally unfair.'"37 Here, where the district court announced its ruling in court and then asked the plaintiffs' counsel to submit an order in accordance with that ruling, which the district court would "consider signing," the process was not fundamentally unfair.38
Fourth, the court upheld the district court's decision to approve the settlement, finding that the district court properly applied the factors set forth in Bennett v. Behring Corp.,39 to determine that the settlement was fair, reasonable, and adequate.40
Fifth, the court rejected an objector's claim that the settlement class did not satisfy Rule 23's adequacy requirement.41 The objector argued that there was a fundamental intraclass conflict because some class members had claims for state statutory damages and others did not.42 The court found this difference less than fundamental, especially in light of the objector's failure to show that the statutory damages...
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