NAVIGATING THE ASCERTAINABILITY SPECTRUM: ANALYZING THE POLICY RATIONALES BEHIND THE VARIOUS ASCERTAINABILITY STANDARDS AS APPLIED TO SMALL-VALUE CONSUMER CLASS ACTIONS.

• Author: Stared, Stephanie

CONTENTS INTRODUCTION I. RULE 23'S REQUIREMENTS AND ASCERTAINABILITY'S ORIGINS II. THE THREE-WAY SPLIT ON ASCERTAINABILITY A. The Policies Behind the Third Circuit's Heightened Ascertainability Standard 1. Unascertainable Classes Violate the Rules Enabling Act 2. Unascertainable Classes Threaten the Defendant's Due Process Rights. 3. Each Fraudulent Class Member Affects the Defendant's Total Liability Because a Court Should Not Use Aggregate Damages 4. Courts Cannot Direct the Required Notices to an Unascertainable Class. 5. Fraudulent Claims Could Reduce Bona Fide Class Members' Relief 6. Unascertainable Classes Compensate Uninjured Class Members 7. Attorneys Receive All the Benefit from Consumer Class Actions 8. Unascertainable Classes Cause an Administrative Headache B. The Policies Behind the Seventh and Ninth Circuits Weaker Ascertainability Standard 1. A Textual Analysis of Rule 23 Suggests that the Drafters Did Not Intend for Courts to Apply a Separate Ascertainability Standard 2. The Heightened Ascertainability Requirement Frustrates Rule 23's Purpose. 3. Corporate Malfeasance Will Go Unpunished Under the Heightened Ascertainability Standard.. C. The Eighth Circuit's Standard: Rigorously Applying Rule 23's Prerequisites Renders a Separate Ascertainability Requirement Unnecessary III. ASCERTAINABILITY IN THE FUTURE A. The Supreme Court May Grant Certiorari to End the Circuit Split. B. Congress May Codify the Heightened Standard C. How Class Plaintiffs Can Combat the Heightened Standard 1. Modern Technology Can Help Ascertain Class Members 2. District Courts Should Take a Larger Role in Aiding Classes CONCLUSION INTRODUCTION

Think back to the last time you went to the grocery store. You might have purchased items such as ConAgra 100% natural cooking oil, Bayer aspirin, or a probiotic. Did you keep your receipt? It turns out that the 100% natural cooking oil you purchased was anything but 100% natural. But because you did not keep your receipt, you have no recourse against the company. (1) You cannot join a class action and vindicate your rights because of a judge-made doctrine-ascertainability. The corporation's conduct will go unpunished, and it will continue to mislead unwary consumers. (2)

Ascertainability has become one of the most hotly contested issues in class action litigation. (3) Recently, a growing number of class certification decisions are turning on an "implied" requirement of Federal Rule of Civil Procedure 23--that a proposed class must be ascertainable. (4) A court can determine whether a proposed class is ascertainable without discovery, and many courts are willing to dispose of class actions at the pleading stage. (5) This ascertainability doctrine poses dire consequences to small-value consumer class actions.

Circa 1970, courts began finding it "elementary that in order to maintain a class action, the class sought to be represented must be ... clearly ascertainable." (6) But courts were not applying the ascertainability standard as a separate prerequisite to class certification as they are today. (7) It is likely that courts did not find it necessary, especially given the types of class actions in federal court. At that time, a class action typically involved securities claims, where courts could easily identify class members from financial records. (8) Consumer class actions were almost never brought in federal court, so courts avoided answering the tough ascertainability questions. (9)

But Congress opened the doors to the federal courts for consumer class actions with the Class Action Fairness Act in 2005. (10) The Act allows a class action to proceed under diversity jurisdiction so long as the class altogether seeks at least $5 million. (11) Once Congress created a new way to establish jurisdiction in federal courts, plaintiffs brought class actions, and the federal courts could no longer hide from addressing the ascertainability requirement.

This Note explores the controversy over the heightened ascertainability requirement and its effect on small-value consumer class actions. Part I explains the class-action requirements under Rule 23 and ascertainability's textual origins. Part II explores ascertainability's different forms and explains the policy arguments supporting each version. Part II also argues that the policy rationales supporting the heightened ascertainability standard do not pass muster. The heightened requirement should be abandoned in favor of a weaker standard. Part III explores the possibility that class plaintiffs will likely face the heightened standard with increasing frequency and proposes ways that class plaintiffs can combat the heightened standard.

1. RULE 23'S REQUIREMENTS AND ASCERTAINABILITY'S ORIGINS

   Before delving into the ascertainability debate, one should understand Rule 23's requirements for class actions in federal court and where the ascertainability doctrine originated. Because class actions are meant to be an exception to the normal rule that requires litigating claims individually, (12) plaintiffs cannot file class actions as they would an ordinary lawsuit. Typically, an individual plaintiff initiates a lawsuit by simply filing a complaint with the court. Class actions are more complicated. A district court must certify the class before the litigation can proceed. (13) During this certification process, the district court thoroughly examines the plaintiffs' class-action proposal. The judge must ensure the class meets several certification requirements before allowing the class to move forward.

   Those certification requirements are explicitly laid out in Rule 23. To be certified, the class must satisfy four prerequisites--numerosity, (14) commonality, (15) typicality, (16) and adequacy (17)--and then fit into one of three categories. (18) Relevant here, classes fall under the third category, 23(b)(3), when "questions of law or fact common to class members predominate over any questions affecting only individual members" and when "a class action is superior to other available methods for fairly and efficiently adjudicating the controversy." (19) Once the judge believes these requirements are met and certifies the class, the certification order must include a class definition. (20)

   Defining a class is not an easy task. The class definition must be "concrete, objective, and closely tailored to the facts giving rise to the claims." (21) This definition allows potential class members to receive notice of the proceeding and understand their right to opt out of the class. The class definition dictates who benefits from a verdict or settlement if a class prevails, and explains which members are precluded from filing another suit alleging the same injury. (22)

   As if all these requirements were not enough, courts recently began imposing an additional prerequisite to class certification--ascertainability. (23) "Ascertainability" is not mentioned in Rule 23; instead, the doctrine is judicially crafted. (24) No one can agree upon one particular textual source, but courts point to a few places in Rule 23 that could lend support to the ascertainability doctrine. (25)

   First, Rule 23(a) refers to a "class" upon which the prerequisites are imposed. Some courts infer that this "class" requires a definite or ascertainable class. (26) These courts argue that they cannot apply the Rule 23(a) prerequisites without first knowing who belongs to the class. (27) Second, Rule 23(c)(1)(B) requires that a certification order "define the class and the class claims, issues, or defenses," and "appoint class counsel." (28) A small number of courts believe this rule requires that the class be ascertainable. (29) These courts argue that the required class definition must be specific enough to identify the class members. Third, courts that advocate for a stricter version of ascertainability believe that the doctrine could be implied from the manageability inquiry under 23(b)(3) and 23(b)(3)(D). (30) Rule 23(b)(3) requires that "a class action is superior to other" dispute-resolution methods and Rule 23(b)(3)(D) goes further to require a district court to consider "the likely difficulties in managing a class action." (31) These courts believe that if it is not administratively feasible to ascertain the class members, then the class action may not be superior to other available dispute-resolution methods. (32)

2. THE THREE-WAY SPLIT ON ASCERTAINABILITY

   Over roughly the past decade, almost every circuit has weighed in on the ascertainability debate. (33) Once the dust settled, three approaches to ascertainability emerged. Those approaches are most easily understood when placed on a spectrum based on how difficult it is to satisfy each standard.

   On one end, the Third Circuit created a heightened standard that requires the plaintiff to make two showings: first, the class must be "defined with reference to objective criteria," and second, there must be a "reliable and administratively feasible mechanism for determining whether putative class members fall within the class definition." (34) On the other end, the Eighth Circuit believes that the extra ascertainability standard is unnecessary as long as the district court rigorously applies Rule 23's requirements. (35) Somewhere in the middle lie the Sixth, Seventh, and Ninth Circuits. These courts acknowledge that there is a preliminary ascertainability requirement, but they only require that the class members be identified with reference to objective criteria. (36)

   Because Rule 23 does not contain an explicit ascertainability requirement, courts ultimately make a policy judgment when choosing which standard to adopt. They weigh the policies behind the rule and decide which policies are more important. Courts that adopt the heightened ascertainability standard strongly believe that unascertainable classes violate the defendant's due process rights. Courts that adopt the weaker ascertainability standard value consumer class...